did you do the borrowing amount through payroll? or did you just issue a chq? Do you have a ledger account associated in company A for the borrowed money? 

A cheque was issued to the employee. Company A does have a ledger account for the borrowed money.

I'm assuming Company A and Company B are related... You can make the following entry : In Company A in the General Journal:  Credit:  Loan Receivable  for the amount of the loan and Debit  Company B intercompany account. This way you have cleared out the loan in Company A and moved it to Company B. In Company B you will make the following entry in the General Journal. Debit Loan Receivable for the loan amount and credit Company A intercompany acct. This will set up the loan in Company B and show the amount came from Company A.

I'm assuming the companies are related and that you have an account in each company called intercompany in the Liabilities ledger accts. These two account , the one in A and the one in B should be exact opposite balances Ie Company A would show a debit for intercompany account and Company B would show a credit for intercompay account.

let me know if this works for you. This is how I move entries between our two related companies .

Thanks Aberi! That will work perfectly!