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Debit the Loan Payable
Debit also the Interest Expenses
And Credit to Cash Account
Loan Interest Dr
Principal Dr
To Bank/Cash Cr
as entry debit credit
loan interest 200
principal 15000
cash or bank 15200
as example
Recording a loan payment which contains both interest and principal payments will involve a debit to Interest Expense, a debit to Loan Payable, and a credit to Cash. The credit balance in your liability account Loan Payable should agree with the principal balance on your lender's records.
Recording a loan payment which contains both interest and principal payments will involve a debit to Interest Expense, a debit to Loan Payable, and a credit to Cash.
The credit balance in your liability account Loan Payable should agree with the principal balance on your lender's records. You can confirm that your balance in Loan Payable is correct by comparing it to the loan balance shown on the loan statement furnished by your lender. If such a statement is not provided, you can phone your lender and ask for the principal balance on your loan.