How to deal with the accounting of loan repayment?

Loan refers to the form of credit activities in which banks and other financial institutions lend monetary funds at a certain interest rate and agree to repay the principal and interest when the repayment period expires. When an enterprise repays a loan, it can conduct accounting through a financial expense account and a bank deposit account. How to deal with related accounting?

Accounting entries for loan repayment

1. When repaying bank loan interest:

Cumulative time:

Debit: financial expenses-interest expenses

Loan: interest payable

When paying:

Borrow: interest payable

Loans: bank deposits

When the principal of the bank loan is repaid at maturity:

Borrow: short-term loan/long-term loan.

Loans: bank deposits

What are the accounting entries for short-term loans?

1. When obtaining a short-term loan:

Debit: bank deposit

Loans: short-term loans

2. When the interest accrued at the end of the period:

Debit: financial expenses

Loan: interest payable

3. When repaying short-term loan interest:

Borrow: interest payable

Loans: bank deposits

Note: The interest payable is the accumulated interest amount.

What are the accounting entries for long-term loans?

Debit: bank deposit

Loans: Long-term loans

Borrow: management fee

Loans: interest payable/long-term loans-accrued interest

When repaying long-term loans:

If the interest is paid in installments, the principal will be repaid in one lump sum:

Borrow: interest payable

Loans: bank deposits

Borrow: Long-term loan-principal

Loans: bank deposits

What are the financial expenses?

Financial expenses refer to the financing expenses incurred by enterprises to raise funds needed for production and operation, including interest expenses (minus interest income), exchange gains and losses and related handling fees, cash discounts incurred or received by enterprises, etc. , including interest expenses (minus interest income), exchange gains and losses (some enterprises, such as commodity circulation enterprises and insurance enterprises, account separately, excluding financial expenses), handling fees of financial institutions, cash discounts incurred or received by enterprises, etc.