What are the accounting methods of short-term loan interest?
There are two accounting methods for short-term loan interest:
Short-term loan interest is charged on a monthly basis, or the principal and interest are repaid at one time, but the interest amount is not large, and the interest expense can be directly included in the current profit and loss; Short-term loans are charged interest on a quarterly (or semi-annual) basis, or the principal and interest are repaid in one lump sum. However, if the interest amount is large, monthly withholding, confirmation and expenses can be made by withholding.
How to do the accounting entry of returning the interest of bank loans?
If it is short-term loan interest
Debit: financial expenses
Loans: bank deposits
If it's interest on a long-term loan
Debit: financial expenses (interest on the last installment)
Debit: Interest payable (accrued interest)
Loans: bank deposits
How to make accounting entries after receiving bank deposit interest?
Financial expenses refer to the financing expenses incurred by enterprises in the process of production and operation to raise funds. Including interest expenses (minus interest income) incurred in the production and operation of enterprises, exchange gains and losses (some enterprises, such as commodity circulation enterprises and insurance enterprises, account separately, excluding financial expenses), handling fees of financial institutions, cash discounts incurred or received by enterprises, etc.
When receiving interest on bank deposits
Debit: bank deposit
Debit: Finance Expense-Interest Income (Red)
The financial software keeps accounts, and all the gains and losses at the end of the month are transferred to this year's profit account. Interest expenses and handling fees in financial expenses shall be paid by the borrower. In order to facilitate carry-over, interest income is indicated in red. If the interest income is taken as the accounting entry of the credit, the credit of the financial expenses at the end of the month cannot be carried forward, and the data in the balance sheet and the income statement do not match. This is a problem with the setting of financial software.
At the end of the month,
Debit: this year's profit
Loans: financial expenses