With a house loan I have the loan account in liabilities with the correct balance
But they are paying interest only which is not included in the loan so do I open another account in liabilities call interest only I do not know the interest amount
Is this a personal loan or a business loan.
Interest on a personal loan would go to drawings / shareholder loan depending on the business type.
Interest on a business loan would go to the P&L Interest Paid expense account
It could be a business loan but secured by a private house, so interest would still be P&L expense
I am doing their rental accounts
I found this
Interest
You can claim the interest charged on money you’ve borrowed to buy your rental property. However, if you:
borrowed part of the money for another purpose, or
topped up the mortgage for another purpose, for example to consolidate debt or to buy the house you live in
you can only claim the interest that relates directly to the rental.
and it is interest that they have for borrowing for buying the rental house
If the loan is 100% related (spent) to the rental property, then the interest would be a deduction (expense) against the income. If the loan is only used 80% towards the rental property, then 80% of interest is the expense.
I claimed it it just seemed a lot ird might look at as previous years they have made a profit this year a loss. They refinanced to an interest only loan from a split loan.
As long as the refinanced loan is 100% related (dedicated) to the rental property, the previous split loan was obviously not 100% related to the rental property.
No I meant split as in principle and interest and yes 100% rental