Interest payable on unsecure loan

This query is : Resolved

Ramesha.M (Querist)
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01 September 2012 Dear sir

Interest payable on unsecured loan amount where to shown whether indirect expenses or current liabilities

please tell me

Regards
Ramesha.m

CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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01 September 2012 Interest Payable is Expenses or Liability?
Confirm.

Entry is
Interest Exp dr. (ID Exp.)
to Int Payable Account. (Current Liabilies)

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Ramesha.M

Ramesha.M (Querist)
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01 September 2012 Dear sir

this is expenses

interest exp account debit
interest payable credit

so i understood

Thanks for your valuable information

Regards
Ramesha.m

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CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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01 September 2012 I disagree CA ayush

Interest is expense but it is payable to any person firm or body corporate

therefore entry would be

Interest A/c.......DR
To Party to Whom Interest is paid...CR

it will be directly added to the Liabilities section under Unsecured Loans

CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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01 September 2012 No Need.
Its Added to Ledger Only When U R Not Paying Interest, That Will Going to Add in Principle Amount.

If U R Going to Pay it in Within One Year, Then It Should Be Marked as Current Liability Only.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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01 September 2012 he already said that it is Interest payable on unsecured loan

CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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01 September 2012 He Said Its Payable, But Not Duration.