Officer Receivables
Definition: Amounts owed by company officers
Scope:NarrowDifficulty:Easy
Amounts owed by company officers
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Loan to officer | ||
| Board approves $10,000 loan to CFO at 4%. | ||
| Officer ReceivablesAsset+ | $10,000 | |
| CashAsset− | $10,000 | |
| Related-party transaction; must be disclosed. | ||
| 2. Accrue interest | ||
| $10,000 × 4% = $400. | ||
| Interest ReceivableAsset+ | $400 | |
| Interest RevenueRevenue+ | $400 | |
| Interest recognized in period earned. | ||
| 3. Officer repays with interest | ||
| Officer remits $10,400. | ||
| CashAsset+ | $10,400 | |
| Officer ReceivablesAsset− | $10,000 | |
| Interest ReceivableAsset− | $400 | |
| Loan fully settled. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
Officer ReceivablesOfficer ReceivablesAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$10,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$10,000.00
$0.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$10,400.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$10,000.00
$400.00
Interest ReceivableInterest ReceivableAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$400.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$400.00
$0.00
Interest RevenueInterest RevenueRevenueIncome earned from business operations. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$400.00
Normal bal. ▶
$400.00
DurationShort & Long-Term
Related Subjects
Components
- Interest ReceivableOfficer loans typically bear interest
Related
- Employee ReceivablesBoth are amounts owed by company insiders
- Non-Trade ReceivablesOfficer loans are classified as non-trade receivables
Contrast
- Accounts ReceivableA/R is from customers; officer loans are related-party transactions
External Links
- Related-party transaction — Wikipedia