Vinod limited takes loan from HDFC bank of ₹25 lakhs which is to be pa...
Introduction
In the balance sheet, the loan taken by Vinod Limited from HDFC Bank will be recorded under the liabilities section. Specifically, it will be classified as a long-term liability since the loan has a repayment period of 15 years.
Balance Sheet Structure
The balance sheet is divided into two main sections: assets and liabilities. The liabilities section is further divided into current liabilities and long-term liabilities. The loan taken by Vinod Limited will be recorded under long-term liabilities.
Long-Term Liabilities
Long-term liabilities are obligations that are not due within the next operating cycle or one year, whichever is longer. These obligations are expected to be settled over a longer period of time, usually more than one year.
Recording the Loan Amount
The loan amount of ₹25 lakhs taken by Vinod Limited from HDFC Bank will be recorded in the balance sheet as follows:
1. Long-Term Liabilities: This section will include all the long-term obligations of the company, including the loan amount.
2. Bank Loan: Under the long-term liabilities section, a specific line item named "Bank Loan" will be created to represent the loan taken from HDFC Bank.
3. Amount: The loan amount of ₹25 lakhs will be mentioned next to the "Bank Loan" line item.
4. Due Date: Since the loan is to be repaid in 15 years, the due date will be mentioned as well, indicating the length of the loan term.
5. Interest: The balance sheet may also include a separate line item for "Accrued Interest Payable" if any interest has been accrued on the loan amount. This represents the interest that has accumulated but has not yet been paid.
Example:
Long-Term Liabilities
- Bank Loan: ₹25,00,000
- Due in 15 years
Accrued Interest Payable: ₹X (if applicable)
Summary
In the balance sheet, the loan taken by Vinod Limited from HDFC Bank will be recorded as a long-term liability under the "Bank Loan" line item. The loan amount of ₹25 lakhs will be mentioned, along with the due date indicating the loan term. Additionally, if any interest has been accrued, it will be recorded separately under "Accrued Interest Payable".