Question

interest payable on loan ( journal entry )

Answer 1

Journal Entry :

If we had already paid in respect of this loan in the current year -

Interest  A/C   Dr     Rs.xx

     To Interest Payable A/C  Rs.xx

(being Interest Payable on loan)

If no interest is paid in the current year -

Profit & Loss A/C   Dr   Rs.xx

   To Interest Payable A/C   Rs.xx

(being Interest payable on loan charged to P&L A/C)

Answer 2

Journal entry  for pay interest on the loan.

Explanation:

                                  Books of (----Limited)

                                      Journal Entry

Date         Account Title and Explanation       Debit   Credit

              Interest on loan                  A/c Dr.     xxx

                To Bank / Cash                  A/c                         xxx

                      (Being amount pay for interest on the loan)

Note: Interest on the loan is an expense and all expenses will be debit.

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