I have a l
ong-term shareholder loan. I created an account for it, and correctly created a loan for $16,000. Now the loan is acquiring interest owed, although it is not yet in repayment.
I tried entering a manual journal entry like this:
Financing charge Debit $126.44
Shareholder loan Credit $126.44
However, this must not be the right way to do it because now my cash flow statement shows $126.44 coming in to the organization through financing activity. Obviously no cash came in--it's interest owed.
How should I do this?