How to use the new ledger account and pay interest entries

If it is a working capital loan, it is a short-term loan and is accounted for in the "short-term loan" account.

The "Withholding Expense" account is abolished in the new accounting standard, and the accrued interest is accounted for in "Interest Payable", and the interest expense is accounted for in "Financial Expense" ("Interest Expense" for financial enterprises), and the entries are as follows:

At the end of the month, interest is withheld.

Debit: Finance fee 500

Credit: Interest payable 500

2. When receiving the bank interest receipt to pay the interest.

Debit: Interest payable 1500

Credit: Bank deposit 1500

Or: Because the interest is calculated on a quarterly basis, the following entries can also be made at the end of June, and the voucher can be pasted after the bill returns

Debit: Finance fee 500

Interest payable 1000

Credit: Bank deposit 1500

When accruing the loan interest payable: ((If the interest is short-term and included in the "short-term loan", if it is long-term and the interest is paid in installments, the interest is calculated through the "Interest Payable" account).

Borrow: Finance Expense – Interest Expense.

Credit: Interest payable.

When paying interest on the loan:

Debit: Interest payable.

Credit: Bank deposits.

Interest payments (non-financial corporations):

Borrow: Finance Expense – Interest Expense 500

Debit: Interest payable 1000

Credit: Bank deposit 1500

Payment of interest (financial enterprises):

Borrow: Interest expense 500

Debit: Interest payable 1000

Credit: Bank deposit 1500

Long-term interest payments are done in the same way as short-term interest payments.

April: Borrow: Finance Expenses 500

Credit: Interest payable 500

May: Borrow: Finance Fee 500

Credit: Interest payable 500

June: Borrow: Finance Fee 500

Credit: Interest payable 500

Jul: Borrow: Interest payable 1500

Credit: Bank deposit 1500

Replace withholding charges with other payables.

Replace with other payables.

Accrual is. Borrow: Finance Expenses.

Credit: Interest payable.

Pay. Debit: Interest payable.

Credit: Bank deposits.

If the payment is made directly, it is not accrued.

Borrow: Finance Expenses.

Credit: Bank deposits.

On the balance sheet date, the interest expense shall be calculated and determined according to the amortized cost and the effective interest rate, and the accounts such as "interest expense", "construction in progress", "financial expenses" and "research and development expenditure" shall be debited, the unpaid interest payable shall be calculated and determined according to the contract interest rate, and this account shall be credited, and the account of "long-term borrowings - interest adjustment" shall be debited or credited according to the difference.

If the difference between the contract interest rate and the actual interest rate is small, the contract interest rate can also be used to calculate and determine the interest expense. When interest is actually paid, this account is debited and accounts such as "Bank Deposit" are credited. The credit balance at the end of this account reflects the unpaid interest payable by the enterprise.

How to do the accounting entries for interest receivable, interest receivable, interest on bonds that have reached the interest payment period but have not yet been received included in the price actually paid for short-term bond investment.

In order to reflect the increase or decrease of interest receivable and its balance, an enterprise should set up an account of "interest receivable" for accounting.

Interest receivable is an asset class account. The debit side registers the increase in interest receivable, and the credit side registers the interest received. The balance at the end of the period is debited, reflecting the interest that has not yet been received by the enterprise.

When the enterprise recognizes the interest receivable, the accounting entries are:

Loan: interest receivable, credit: investment income, when the enterprise actually receives interest receivable, the accounting entries are:

Borrow: Bank deposits are rolled back, Credit: Interest receivable.

1. Interest income entries.

Borrow: Bank deposit.

Credit: Finance Expenses - Interest Income.

2. Handling fee.

Debit: Finance Fee - Handling Fee.

Credit: Bank deposits.

3. At the end of the month, when the financial expenses are carried forward.

Borrow: Finance Expenses - Interest Income.

Credit: Finance Fee - Handling Fee.

Credit: Profit for the year.

4. Register the sub-ledger according to the prepared accounting vouchers.

The interest payable refers to the interest payable to units and individuals by the enterprise in accordance with the duration and interest rate of the jujube agreed in the contract, and the relevant accounting entries are written.

When accruing: borrowing: financial expenses, R&D expenditures, projects under construction, etc.

Credit: Interest payable.

When the actual payment is made:

Debit: Interest payable.

Credit: bank deposits, etc.

Accounting for interest payable.

The interest payable includes the interest payable on long-term loans and corporate bonds that are paid in installments and repaid at maturity. The difference between interest payable and accrued interest: interest payable belongs to borrowings, and accrued interest belongs to corporate deposits.

This account accounts for the interest payable by the enterprise in accordance with the contract, including the interest payable on long-term loans that are due for repayment of principal due to the allocation of high absorption deposits, interest payment in installments, and corporate bonds.

The interest payable is a liability account, and the debit side indicates a decrease, that is, the interest has been paid; The credit indicates an increase, i.e., an increase in the unpaid interest payable. The closing credit balance, which reflects the unpaid interest payable by the business.

What are the finance charges?

Financial expenses refer to the expenses incurred by enterprises in order to raise funds required for production and operation. Financial expenses include: net interest expense (the difference between interest expense and interest income), net exchange loss (the difference between exchange loss and foreign exchange gain), handling fees of financial institutions, and other expenses incurred in raising production and operation funds.

Financial expenses are profit and loss accounts, with the debit side indicating an increase and the credit side indicating a decrease.

Accounting entries related to financial expenses.

1. Interest income entries.

Borrow: Bank deposits are simply sold and dismantled.

Credit: Finance Expenses - Interest Income.

2. Handling fees are incurred.

Debit: Finance Fee - Handling Fee.

Credit: Bank deposits.

3. At the end of the month, when the financial expenses are carried forward.

Borrow: Finance Expenses - Interest Income.

Credit: Finance Fee - Handling Fee.

Profit for the year.