Loan adjustments

Hi there,

I have a question regarding how use of cash from a loan would be balanced in the accounting equation if the cash was spent without repaying the loan itself. The following example should make my question clearer:

1) Company A takes out a loan – debit cash, credit loans / liability account – these would be balanced on the overall accounting equation
2) Company A spends the cash from the loan on an expense e.g. wages, but does not make any repayments on the actual loan
3) In this situation, the cash account should be credited, and wages account debited
4) The loan has not been repaid, but the liability still exists – there is therefore no corresponding asset as the cash has all been used up on wages
5) What should the correct balancing asset be for the remaining loan in this instance?

Many thanks in advance.