Accounting queries - interest on director's loan account

[colwit]

Hi Everyone I am the admin officer of a Private Company and record all Income and Expenditure. I would like to know about charging the Director interest for debit funds in his Loan Account, what the interest rate is. Would it have to be on a monthly basis and posted to Interest Income in the Company’s records?

[Andromeda]

Hi Colwit

These are the very minimum rates you should use if you don't want to get beaten up by SARS, and you should compound it monthly.

[colwit]

Thanks Andromeda I think I'll use Prime Rate to be on the safe side, I think it's 10.25%.