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Why is bank loan under debit side in double entry? isn't bank loan a liability and when it increases it's suppose to be under credit side?

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Question added by albert tan
Date Posted: 2017/02/16
Clint Leon
by Clint Leon , Senior Accountant , Metriqe Solutions Pvt Ltd

While we receiving the bank loan, we are getting money into our account. Bank account is a real account,hence the golden rule of accounting apply here: Debit what comes in;Credit what goes out. Here money came to our bank account. So you will debit the bank a/c.And Obviously, bank loan is a liability and we will credit the liability account.Liability is Credit balance. Thus the double entry is completed and the balance sheet becomes balanced.Liability and asset is booked.

Abdullah Aziz Eldain Morsi  Elgendy -        CMA  Candidate
by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies

thanks for your invitation

 this happens when you already  you already paid the loan bank

 the entry will be  as the following

                    DR                CR

loan bank      10000

     CASH                          10000

saheer tm
by saheer tm , Sales Advisor , Danube Home

liability is a burden to the company ,if liability  increases it must be under the creditside.

FARES AHMMED SHARF AL-AKHALI
by FARES AHMMED SHARF AL-AKHALI , محاسب قانوني معتمد , فارس الأكحلي محاسب قانوني معتمد

I agree with the answers from Dear Friends,

Zubair  Ali
by Zubair Ali , Sr. Accountant , Etihad Towers For Real Estate LLC

Debit the Bank Account ( because the cash is increasing )

Credit the Loan ( Because the liability is increasing ) 

Soliman Abd  ALmalak Gendy
by Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

We debit what comes andk credit what goes out, so a bank account is debited by amount that received _The loan bank is a liability,so it will be credited

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