How to calculate the interest of personal loan to the company?

Debit: financial expenses-interest

Loan: Cash on hand or bank deposit.

1. According to Article 38 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC), the following interest expenses incurred by enterprises in their production and business activities are allowed to be deducted:

The interest expenses of non-financial enterprises borrowing from non-financial enterprises shall not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period.

2. Therefore, in the final settlement of enterprise income tax, the interest paid by the company to personal loans is allowed to be deducted according to the interest rate of similar loans of financial enterprises in the same period, and the excess is not allowed to be deducted before tax.

When a company borrows interest from an individual, it shall calculate and pay personal income tax at the rate of 20% according to the actual interest paid, which shall be withheld and remitted by the interest paying unit.

How to do the accounting entries of the company borrowing from individuals?

1. When borrowing money:

Debit: bank deposit

Loans: other payables/short-term loans

2. When the interest is accumulated as planned:

Debit: financial expenses

Loan: interest payable

3. When paying interest:

Borrow: interest payable

Loans: bank deposits

Taxes payable-personal income tax payable

4. When paying taxes: