Interest
Querist : Anonymous
what is the journal entry for capitalized interest
thank you
To Interest Charge Cr xxx
Querist : Anonymous
i can create 'interest charge Cr' under current liability head.(is it payable a/c)
thank you
Interest Expense Ac Dr.....xx
To Borrowing/Accrued interest Cr.....xx
Then you pass the earlier suggested entry for capitalisation. This will reduce the debit in P&L and bring in liability at balance sheet date.
As and when interest is paid, you pass the following entry:
Accrued Interest (B/S) Dr.....xx
To Bank Cr.....xx
Querist : Anonymous
thank you very much for your kind attention.
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