Question

Loan from Bank at 12% P.a (1.1.2020) Interest on bank loan 15,000
In p&l ac what should we write in inner column​

Answer 1

Answer:

Interest paid on bank loan is an indirect expense and is debited to the profit and loss account as it is a charge against profit. In the case the total interest paid for the year is 12% of Rs 40000 i.e., 4800. The interest already paid is Rs 3800, the remaining Rs 1000 has to be paid as it is a charge against the profit. Thus Rs 1000 will be debited to the profit and loss account to pay the full amount of interest.

Answer 2

Answer:

interest paid on bank Loan is an indirect expense and is debited to the profit and loss account as it is a charge against profit . in the case the total interest pait for the year is 12% of rupees 4000 i.e,4800. The interest already paid is Rs 3800, the reaming Rs 1000 has to be paid as it is a charge against the profit and loss account to pay the full amount of interest.