Journal Entry for Interest on Loan
All companies all over the world take debt and when the company takes it from the creditors, banks or financial institutions than it has to pay interest on that debt at regular intervals which may be monthly, quarterly or yearly. Given below is the journal entry for interest on loan -
Interest on loan Account Dr
To Cash Account
Since money has gone from the company to the creditor it is credited in the above entry and also per the rule expenses are debited which has also been done in the above entry.
Tags: interest on loan