Accounting of Interest payment

Nagarjun (Chartered Accountant - Job)   (62 Points)

24 July 2021  

Hi all,
01 query.

My company is arranging buy now pay later financing to customers through online platforms.

Financier will pay transaction amount to retailer on date of sale.

My Comlany have to repay loan and interest to financier on due date. It is a zero rate interest to customer, wherein we will be collecting only sale amount from customer if honored by customer on due date.

Please advice nature of accounting for interest payment to financier in our books (loan will be in the name of customer). And Financier will not issue any invoice as the same is GST exempted.

Thanks in advance.