Accounting treatment of paying bank loan interest
1. The loan term is within one year (including 1 year).
(1) When lending to a bank
Debit: bank deposit
Loans: short-term loans
(2) The amount of interest actually paid is small.
Debit: financial expenses
Loans: bank deposits
2. The loan term is over one year (excluding 1 year).
(1) When lending to a bank
Debit: bank deposit
Loans: Long-term loans
(2) loan interest treatment
Belong to the preparation period:
Borrow: Long-term deferred expenses (note: production and operation are transferred to financial expenses at one time in the current month)
Loans: Long-term loans
Belonging to the period of production and operation:
Debit: financial expenses
Loans: Long-term loans
Belonging to the special loan related to the purchase and construction of fixed assets, before the fixed assets reach the usable state:
Borrow: Construction in progress.
Loans: Long-term loans
After the completion of fixed assets:
Borrow: fixed assets
Loan construction
Interest generated after the fixed assets reach the use state:
Debit: financial expenses
Loans: Long-term loans
What are financial expenses?
Refers to the expenses incurred by enterprises to raise funds needed for production and operation. Including interest expenses, exchange gains and losses, handling fees of financial institutions, and cash discounts incurred or received by enterprises in the process of production and operation. However, the interest expenses incurred during the preparation of the enterprise shall be included in the start-up expenses; Borrowing expenses that should be capitalized for the purchase, construction or production of assets eligible for capitalization are accounted for in accounts such as "construction in progress" and "manufacturing expenses".