The first recognizes the liability; accountants debit interest expense and credit interest payable. This entry may be done well in advance of actually paying the interest if necessary. The second entry is necessary when the interest comes due; the accountant will debit the associated interest ...
Interest payable is the interest expense that has been incurred (has already occurred) but has not been paid as of the date of the balance sheet
What are Interest Rate Options? What is Times Interest Earned? What are Payment Days? Discussion Comments WiseGeek, in your inbox Our latest articles, guides, and more, delivered daily. Subscribe
What is the interest coverage ratio? What is the stated interest rate of a bond payable? How do you record the interest that is unpaid on a note payable? What is the difference between dividends and interest expense? Related In-Depth Explanations Accounting Basics Accounting Principles ...
Accounts receivable (AR) is money customers owe, while accounts payable (AP) is money suppliers or clients owe for goods or services purchased on credit. Is accounts receivable an asset or liability? Accounts receivable is considered an asset because it represents the money that a company expects...
An alternative to factoring is to establish a line of credit for your business. You can draw on this line of credit while you wait to collect payments. You’ll pay your bank interest for the money that you have borrowed from your line of credit and potentially some additional fees to keep...
You can opt for a cumulative deposit wherein the interest earned is reinvested into the deposit, and you get the capital amount and interest pay-out when the FD matures. You can opt for a non-cumulative FD, wherein the bank pays interest on a weekly, quarterly, semi-annual, or annual ...
Accounts receivable (AR) is an item in thegeneral ledger (GL)that shows money owed to a business by customers who have purchased goods or services on credit. AR is the opposite of Accounts payable, which are the bills a company needs to pay for the goods and services it buys from a ve...
Times Interest Earned Ratio Formula The times interest earned ratio is a company's earnings before interest and taxes divided by a company's interest payable on bond and debt obligations: Earnings Before Interest and Taxes / Interest Expense = times interest earned ratio ...
Some examples of current liabilities that appear on the balance sheet include accounts payable, payroll due, payroll taxes, accrued expenses, short-term notes payable, income taxes, interest payable, accrued interest, utilities, rental fees, and other short-term debts. ...