Interest on Rent paid and Interest on rent received

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This discussion explains the journal entries for both interest paid on rent and interest received on rent. Interest paid on rent is treated as an expense, with the entry being Debit Interest on Rent Account to Cash/Bank. Conversely, interest received on rent is income, with the entry being Debit Cash/Bank to Interest on Rent Received Account. Both entries affect the Profit and Loss account, but not directly the Balance Sheet, as only the net profit is transferred.

AISHWARYA

AISHWARYA (Querist)
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30 April 2020 Hi,

Can anyone pl tell me Interest on Rent paid and Interest on rent received journal entry with example and also B/S effect.

Gokul Sharma

Gokul Sharma (Expert)
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01 May 2020 int on rent paid is your expense
Int on rent A/c dr..........
to cash/bank

int on rent received is your income
cash/bank dr..........
to int on rent received

both are the part of profit and loss a/c
this will not effects the Balance Sheet.

only net profit will trf to balance sheet,

AISHWARYA

AISHWARYA (Querist)
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01 May 2020 Thank you very much sir.

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