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Nagarjun (Chartered Accountant - Job)     24 July 2021

Accounting of Interest payment

Hi all,
01 query.

My company is arranging buy now pay later financing to customers through online platforms.

Financier will pay transaction amount to retailer on date of sale.

My Comlany have to repay loan and interest to financier on due date. It is a zero rate interest to customer, wherein we will be collecting only sale amount from customer if honored by customer on due date.

Please advice nature of accounting for interest payment to financier in our books (loan will be in the name of customer). And Financier will not issue any invoice as the same is GST exempted.

Thanks in advance.

 2 Replies

Rama chary Rachakonda

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)     24 July 2021

at the time of credit sales

debit financiar with interest account

and credit with sales account

at the time of pay from financiar

debit interest account 

credit financiar account with interest along with finance amount

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     24 July 2021

What is the collection period of you financier? What is the collection period from the customer?


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