The accounting of enterprise loans is as follows:

Accounting entries of company loans to banks

Short-term loans with a loan term of less than one year are generally borrowed to meet the needs of normal production and operation. Long-term loans for more than one year. It is generally used for long-term engineering construction.

Borrowing: bank deposit

Lending: short-term borrowing/long-term borrowing

Borrowing also needs to pay interest, usually on a monthly basis, and interest is usually paid on a quarterly basis, or on a semi-annual basis, and short-term borrowing is more about repaying the principal and interest at one time.

Borrowing: financial expenses-interest expenses

Lending: interest payable

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let's see what interest expenses incurred in production and business activities are allowed to be deducted before tax. Among them, the interest expenses of non-financial enterprises borrowing from non-financial enterprises can be deducted if they do not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period. If it is the interest expense of borrowing from individuals, it can also be deducted before tax. Individual income tax is paid at the rate of 2% for the interest income earned by individuals, and the enterprise has the obligation to withhold and remit the interest, and then pay the tax.