What would the entry be for a monthly interest payment on a long term loan?

• Dr: Interest Expense, Cr: Cash

• Dr: Cash, Cr: Interest Expense

• Dr: Long Term Liability, Cr: Interest Expense

• Dr: Interest Expense, Cr: Long Term Liability

Question added by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date Posted: 2015/06/08

Upvote (2) Views (10) Followers (5) Answers (4) Report Question

by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Yes Option1 is the right answer.

by Vipul Kapadia , Asst. Finance Manager , Abu Dhabi National Oil Company

Debit interest expense and credit bank account

Finance Cost Dr. XXXXXX (P/L account) Cash/Payable Cr. XXXXX (Balance sheet under Current asset/Current liability respectively)

by Zehab Osman , Accountant , Aldar Consultancy Co.

• Dr: Interest Expense, Cr: Cash

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