Interest Payable

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Can someone please help!! <BR><BR>If a company has a bank loan of £5000 and the interest is charged at 5% a year and you need to do the adjustments for the etb which account other than the interest payable would you adjust??<BR><BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Interest Payable

    I am not 100% sure but sometimes there is a bank loan account that you would adjust, or maybe the bank.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Interest Payable

    Has the question not given u any additional info??<BR>Maybe it just a case of setting up an accrual for the interest for when the bank claim the interest/money due! ? !<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Interest Payable

    if you were to dr the p&l with Interest payable, then the cr entry would be to bank loan - the logic being that the loan would be reduced by the repayments, but this would then increase with the interest added to it.

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