This is like 3 months late, really sorry about that. Just going
to tackle for May curious souls out there.
"5% Bank loan" is the total bank you you have in your bank, not
5% of it. The percentage is for your interest expense. Meaning that
you are suppose to pay (100000x5%)$ for your interest expense.
going back on topic. You have to pay your loan of 100000$ over 5
years, so each year, you are suppose to pay 20000$ each year. It is
said that you have not record yourself paying 20000$ this end of
year.
cash at bank can be left out of this, the other double entry is
"Current portion of long-term borrowing"
what you are doing is basically taking a portion of long term
borrowings and putting it in current liabilities, because you have
to pay it that year.
so in your balance sheet, Long term borrowings would be (100
000-20 000)$ in your non current liabilities. In current
liabilities, you will have an entry that is "Current portion of
long-term borrowing" of 20 000$.
and you are done!