Question

While reporting the amount of overpaid interest on loan in balance sheet of the firm?

Answer 1

Answer:

Interest expenses may be recorded on the balance sheet as current liabilities before they are expensed. Record it in a liabilities account, if it was accrued prior to being paid. This liabilities account is also interest payable. ... Record these payments as an asset on the balance sheet before they are expensed.

Answer 2

Explanation:

Interest expense often appears as a line item on a company's balance sheet, since there are usually differences in timing between interest accrued and interest paid. If interest has been accrued but has not yet been paid, it would appear in the “Current Liabilities” section of the balance sheet.