Journal entry 21

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A company pays emi of Rs 75000- 60000 towards loan  and balance towards interest.  Account  for the payment

Replies (5)
Dr interest on loan 15000
Dr Loan account 60000
Cr Bank account 75000
(being EMI paid)

This is complex. Loan, if you took it n the middle of the year’s, you can pay 6 months clear out the current liabilities and show long term liability. If it is annual emi, then

take the loan amount and divide it by last year’s annuity factor which will give you interest and principle separately. 

I didn’t mean emi, lol an old habit. I meant repayment period

Agree with abhay ji
Thank you abhay ji and yasaswi


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