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Old 12-01-2017, 11:52 AM
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interest accrual for shareholder loans TO a corporation

Can someone please advise me on how to handle the accrual of interest on shareholder loans made TO a corporation? The shareholder has loaned the corporation money for the past several years. There is a promissory note for each loan with a stated rate of interest and a repayment plan. However, no interest has been accrued/expensed/repayed to the shareholder since the very first loan was made several years ago. Also, no loan repayments have been made. How should I go about accruing interest in the books for prior periods? Is this shareholder at risk for having his loans reclassified to equity? How would you handle this situation moving forward?

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