Loan to Unrelated Party

Ben Ghimire

• 21 May 2025 01:35

Hi all,

a client has given loan to unrelated party at 10% interest. 

Its not LRBA, I created Investment Account - "Other Asset" for the loan, but its asking for number of units to enter when coding the loan given transactions.

What is the best way to create a loan to XYZ account, and declare interest from loan as income and remaining repayments as loan repayments?

Thank you 

0

• Official comment

  

  Norman Michael

  • 21 May 2025 04:52

  Hi Ben,

  Make sure the investment account is set as a non-unitised account. This will prevent the system from asking for units when entering loan transactions.

  You can follow this article to change the account to non-unitised if needed:

  Changing investment accounts to unitised/non-unitised

  Additionally, to ensure the interest and repayments are correctly coded, you can create a linked income account. This will help with the allocation of interest income and principal repayments. Here's an article that shows how to set that up:

  Linked accounts

  Once the accounts are linked, you can easily split the payments between the principal and interest portions.

  Hope this helps!

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