We have a former employee that was given a loan when he worked here it was set-up in payroll and payments to the loan were applied.  When he left our employ there was an outstanding balance, the owner has informed me that some of the monies owed have been recovered but the remaining balance will not be recovered.  How do I record this uncover able amount to show the loss to the company, and have it removed from payroll, also there is a small amount of Vacation pay owed which we would like to recover for the loan, how would this be recorded?