Accounting entries for repayment of short-term loans due
When borrowing short-term loans,
Debit: bank deposit
Loans: short-term loans
When the interest is accumulated,
Debit: financial expenses
Loan: interest payable
When repaying short-term loans,
Borrow: short-term loans
Interest/finance expenses payable
Loans: bank deposits
What is short-term borrowing?
Short-term loans refer to all kinds of money borrowed by enterprises from banks or other financial institutions with a term of 1 year (including 1 year). Short-term loans are generally borrowed by enterprises to meet the needs of normal production and operation or offset a debt.
The creditors of short-term loans are not only banks, but also other non-bank financial institutions or other units and individuals.
Direction of short-term borrowing
Enterprises should account for the acquisition and repayment of short-term loans through the subject of "short-term loans". The lender of this course registers the loan principal, the borrower registers the loan principal, and the balance is in the lender, indicating the short-term loan that has not been returned. This course should set up a subsidiary ledger according to the lender, and make detailed accounting according to the loan type and currency.
What's the interest payable?
Interest payable refers to the interest payable by the enterprise according to the contract, including the interest payable on deposits, long-term loans with interest paid by installments and corporate bonds.
What are the financial expenses?
Financial expenses refer to the expenses incurred by enterprises to raise funds needed for production and operation. Specific items include: net interest expenditure (the difference between interest expenditure and interest income), net exchange loss (the difference between exchange loss and exchange income), handling fees of financial institutions and other expenses incurred for raising production and operation funds.