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Interest expense is shown at debit side of income statement because it is an expense for business.
Interest Expense
Accretion
Type y income before income tax plus interest expense, divided by interest expense our answer here...
Trade Discount are considered cost of sales/reduction in sales dependant upon who the customer is. Cash Discount is always considered Increasing Interest Expense/Reduction of Interest Expense, dependant upon who the recipient is.
This method is preferred over the straight-line method of amortizing bond discount or bond premium. Amortization of a bond discount or premium is the difference between the interest expense and the nominal interest payment. The amortization entry is: Interest Expense (effective interest rate x carrying value) Cash (nominal interest rate x face value) Bond Discount (for the difference)
a credit card discount would be a credit, not an expense.
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Interest Expense is usually calculated by (Carrying Value of Liability*Yield Rate * Time). Carrying Value is the actual present value of the liability (including discounts earned, etc) Interest Expense is the money that actually goes out of the firm. Interest Paid is calculated by (Face Value of Liability*Interest Rate * Time). Interest Paid is the fair-value of dues from the firm, but is not the actual value of the liability. Interest Expense is the amount reflected in the books of the firm, and is usually higher than Interest Paid. This is because Interest Expense often includes the cost of discount amortization(this is necessary when the bond/other liability was gained at a discount. The amortization is worked into the formula above, and hence gives an amount higher than interest paid. This gives the total interest expensed by the Company.) Hope this helps. Cheers
Expense data is usually reported with expense reporting software. The actual setup depends on the company and the type of expense data being collected.
DR - Interest Expense CR - Interest Payable
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.
Interest expense is neither selling or administrative, and it's too significant to be called a general expense. Interest expense is usually called a finance expense and is usually listed separately from SG&A, on the Income Statement
Interest expense is shown at debit side of income statement because it is an expense for business.
Debit Accrued Interest Expense Credit Accrued Interest Payable
Interest Expense