Question

Interest on bank Loan @ 12% is due for 1 month journal entry​

Answer 1

Interest on loan A/c

Loans A/c

Or interest on loan A/c

loan interest payable or due by 40,000

First entry : cannot understand how much interest due on current year

Becoz using first entry on p&l account expenses will debited and whole amount will added to loan account in balance sheet liability side

If you use second one, have proper outstanding expense and loan account

on balance sheet