Question

Paid interest on loan rupees 100

Answer 1

Answer:

Interest on Loan a/c. Dr XX

To Cash/Bank a/c. XX

(Being interest on loan paid)

Explanation:

Interest on loan(paid) is an expense and a nominal a/c. As per golden rule of Nominal a/c - “All expenses and loses are debit” , hence its debited.

Cash/Bank is an asset and real a/c. As per golden rule - “ Credit what goes out”, here cash/ cash from bank is going out or you can say asset is decreasing so cash/bank is credited.

I hope it helps :)