Record a bank loan (borrowing)

Steps

1. Click Accountant in the left menu, then Borrowings.
2. Click New borrowing.
3. Enter the Lender and the Reference (facility or agreement number).
4. Enter the Facility amount (AED) and any Fees deducted from the proceeds.
5. Enter the Nominal interest rate (% a year) and the Term (months).
6. Choose the Repayment: Equal instalments (annuity), Equal principal + interest on the balance, or Interest only, principal at the end.
7. Choose when Instalments fall: Monthly, Quarterly or Annually.
8. Set Drawn on and First instalment due.
9. Choose the bank under Received into / repaid from.
10. Read the preview (number of instalments, total repaid, finance cost, effective rate) and click Record the borrowing.
11. When the money arrives, click Draw down on the loan's row and confirm.

What MAJA does for you

• Builds the repayment schedule and works out the effective interest rate, so fees are spread over the life of the loan instead of expensed on day one.
• Recording posts nothing. Draw down posts Dr your bank / Cr 2500 Bank Borrowings at the net proceeds.
• The register shows the carrying amount, what is due within 12 months and after, and whether ledger 2500 agrees.

Good to know

• The lender, amount, term and drawn date are required. Fees cannot be as large as the loan, and the first instalment cannot fall before the money arrives.
• If MAJA cannot work out an effective rate for the terms, it saves nothing and says so.