Description of how the accounting of Loans / Deposits work in Treasury System.
Example: If you Borrow (Loan)
When a Loan is entered with Fixed interest you can see the accounting for all future periods.
For a Loan with Floating interest you can see one payment period ahead.
Accounting for all amortisation periods are shown for all types of loans.
At start you will debit the checking account and credit your debt account with the Nominal amount.
In accounting rules, use amount types Nominal amount Long and Nominal amount Short if yo want to book long term loans and short term loans on separate accounts. (Long term = if the loan is longer than one year). If you want to book them on the same account use only amount type Nominal amount.
The interest transactions are booked as interest expenses.
At month end Treasury Systems create accounting for the accrued interest and FX Gain/loss if applicable. The accounting will be reversed the first day of next month. You also have the possibility to automatically create accounting from long to short.
At maturity the checking account will be credited and the debt account will be debited with the amortisation amount.