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Interest paid account to loan account

Vikash (G) (393 Points)

08 December 2017

How to do journal entry as interest paid account to loan account and add the interest amount to loan account

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4 Replies

Divakar (Student CA Final ) (11857 Points)
Replied 08 December 2017

Interest A/C dr to interest payable A/c.... And interest payable A/c to bank loan a/c.... Bank loan A/c dr to bank ac... When paid... Hope now it clear

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RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 08 December 2017

Dr. Interest A/c - XXXX
Cr. Loan A/c - XXXX

Dr. Loan A/c - XXXX
Cr. Bank Account - XXXX...

Vikash (G) (393 Points)
Replied 08 December 2017

I am asking as if I have taken a loan of 50000 from a person and I don't pay him interest in cash or cheque rather I did like this I passed journal entry as interest paid account to loan account and added the interest amount to loan account is it right