FI - Question bank - Task 2 - revision example 3

Zana

Hi All!

Can somebody, please clarify section of task 3 for me?
I have highlighted the part that I am struggling with, please see attached.

In the workings for Trade and other payables the interest is £750, but we have been told that the interest on the bank loan for the last 6 months of the year has not been provided for and in the Trial balance there is £750 as interest paid. So shouldn't the answer in the workings be £1500 - obviously I have a knowledge gap here, could someone please explain this to me?

Many thanks in advance for your help!!!

Clintm15

You are correct that the interest charge for the whole year is £1,500. £750 interest was paid as shown on the trial balance and therefore £750 is held on the interest payable account as owed.

Zana

thank you @Clintm15 for taking the time to explain this to me!