[GNC] Directors loan - do I need an expense account?

[Dr. David Kirkby]

A "directors loan" is quite a common thing in the UK for companies. The
concept is fairly simple, so anyone in the world should be able to
understand my description.

Generally the director loans the company money to get it up and running, so
the company has a liability to the director.

https://www.gov.uk/directors-loans/you-lend-your-company-money

The director can charge the company interest, but I don't do this, as it
makes one's personal taxation more complicated.

It's also possible for the director, or close family member to borrow money
from the company with no interest, subject to certain restrictions - it has
to be paid by a certain time.

https://www.gov.uk/directors-loans

I don't think my accountant will particularly care how I do this, but I
thought I would do it this way. If anyone can suggest a better way, please
do.

1) Add myself as a vendor
2) Since the company owes me money, I set the account

Liabilities -> Accounts Payable -> Director Loan.

as I thought that was the closest thing to allowing money to be moved out
of the company, into my personal bank account.

When I tried to pay myself using GnuCash, I was expecting money to go out
of the company bank account,into my personal account, and reduce the
company's liability. However when I set up a bill, I could see it was only
possible to bill this as assets or expenses - *not as a liabilitiy*.

Does this mean I need to set up another account for expenses?

Expenses  -> Director loan ?

If I do that, I could pay from the  company bank account into the Expenses
-> Director loan account, *but it would not reduce the liabilities account*.
I know "split transactions" exist, but I have not studied them. Is that
what I need here?

Can someone please point me in the right direction, so I can move money out
of the company, into my personal account and reduce the company's
liability?

In the event the company paid me the complete directors loan, and I decided
to borrow money from the company, would that expense account just go
negative?

Dave