(1) As short-term loans are liabilities, when the monthly interest of short-term loans is accrued, financial expenses and liabilities increase at the same time.

Debit: financial expenses.

Loan: Interest payable.

(2) When interest is actually paid, bank deposits decrease and liabilities decrease.

Borrow: Interest payable.

Loan: bank deposit.

It is necessary to keep separate accounts for the money received and short-term loans.

Receipt:

Debit: cash on hand/bank deposit.

Credit: accounts receivable.

Loan repayment:

Borrow: short-term loans.

Loan: bank deposit.

Accounting entries when the bank receives loan interest:

1. After receiving the loan:

Debit: Bank deposit.

Loan: Short-term loan.

2. When deducting the payment:

Debit: accounts payable.

Loan: bank deposit.

3. When repaying the principal interest:

Borrow: short-term loans.

Financial expenses-interest payable.

Loan: bank deposit.

Accounting entry definition:

Accounting entries are also called "bookkeeping formulas". Short for "entrance". According to the requirements of the double-entry bookkeeping principle, it lists the records of the corresponding accounts and amounts of each economic transaction. Before registering an account, accounting entries are made through accounting vouchers, which can clearly reflect the classification of economic business, help ensure the correctness of account records, and facilitate post-event inspection.

Each accounting entry mainly includes bookkeeping symbol, account name, summary and amount. Accounting entries are divided into simple entries and compound entries. Simple entries are also called "single entries". An accounting entry in which the debit of one account corresponds to the credit of another account. Compound entries are also called "multiple entries". Refers to the accounting entries corresponding to one account debit, several account credits, or one account credit and several account debits.