Ask Experts Questions for FREE Help !
Ask
    Johburg74's Avatar
    Johburg74 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 23, 2009, 10:45 PM
    Interest expense payable not principle reduction
    Hello!
    I need to do a journal entry for payments from 4/11/07 to date that are interest not principle reduction.
    Please help!
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member
    		  
    #2

    Dec 25, 2009, 05:02 PM

    The journal entries are picked up from the actual payments:-

    DEBIT Interest Paid Account
    CREDIT Bank Account.

    Incidentally the word you need to use is PRINCIPAL not PRINCIPLE.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #3

    Jan 1, 2010, 01:30 PM

    Debit Interest Expense for the amount of interest paid
    Credit Cash for the amount
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #4

    Jan 4, 2010, 09:25 PM

    Theoretically, that's a prior period adjustment. Is this for class, a small company, what? The correct way to take an expense back to 2007 is to subtract it off the beginning retained earnings and not to charge 2007/08 into 09. But for a small company, you might get by with that, depending on who's using the statements and how material it is.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Accrued interest payable for a note payable [ 2 Answers ]

Allen Corp.'s liability account balances at June 30, 2007 included a 10% note payable in the amount of $2,400,000. The note is dated October 1, 2005 and is payable in three equal annual payments of $800,000 plus interest. The first interest and principal payment was made on October 1, 2006. In...

Interest expense and long term notes payable, how do I solve it? [ 1 Answers ]

"the long-term note payable bears interest at 12% per year. The unadjusted interest expense account equals the amount paid for the first 11 months of the 2008 fiscal year. the 250$ accrued interest for June has not yet been paid or recorded. (Note: the company the is required to make a $5,000...

Whether it is a taxable interest income since the principle came from other country [ 3 Answers ]

Q1: My mom from Hong Kong gave me $37,000 to deposit to my US bank, the original purposes was to pay my tuition in US college. I ended up getting a scholarship, so I had the money on CD and earn est. $1500 interest in a US bank in 2007. Would this interest counted as taxable income while I am using...

View more questions Search