I Have taken long term from one of my friend with a certain rate of interest per year and I am planing to make the payment after 3 years. how could i make the journal entry for outstanding interest for Current year and how it balance in balance sheet.
Outstanding interest i can take liabilities side in Balance sheet but how it match to my assets.
Guest
Guest
(Expert)
19 February 2019
Journal entry would be:
Interest on loan Dr. To Outstanding interest payable
Yes, this will be shown in liabilities side. Corresponding assets will be your loan money and interest is reduced from capital account. Hence, the balance sheet will be tallied.
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