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Dear All
We recently posted an entry to capture the draw down of a loan from our lending. The loan is USD denominated, but the general ledger account is in the local currency.
When we captured the entry in the cash book for the USD bank account, we incorrectly processed a payment and so debited the loan account instead of crediting it. See entry below:
Dr. Loan account (Local currency in general ledger) XXX
Cr. US dollar bank account XXX
In order to reverse the incorrect entry, we processed another payment, but we inserted a minus sign in front of the amounts.
Dr. Loan account (Local currency in general ledger) -XXX
Cr. US dollar bank account -XXX
When we performed the bank reconciliation (in US dollars) we found the offsetting amounts and reconciled them as part of the bank reconciliation. However, when we reconciled the loan statement from the lender, we noticed that the amounts on the general ledger account for the loan were both debits and were not offsetting as they were in the cash book and general ledger for the bank account.
Does anyone know what could cause this and, more importantly, how to fix it?
Rgds,
Duncan
We recently posted an entry to capture the draw down of a loan from our lending. The loan is USD denominated, but the general ledger account is in the local currency.
When we captured the entry in the cash book for the USD bank account, we incorrectly processed a payment and so debited the loan account instead of crediting it. See entry below:
Dr. Loan account (Local currency in general ledger) XXX
Cr. US dollar bank account XXX
In order to reverse the incorrect entry, we processed another payment, but we inserted a minus sign in front of the amounts.
Dr. Loan account (Local currency in general ledger) -XXX
Cr. US dollar bank account -XXX
When we performed the bank reconciliation (in US dollars) we found the offsetting amounts and reconciled them as part of the bank reconciliation. However, when we reconciled the loan statement from the lender, we noticed that the amounts on the general ledger account for the loan were both debits and were not offsetting as they were in the cash book and general ledger for the bank account.
Does anyone know what could cause this and, more importantly, how to fix it?
Rgds,
Duncan