How do companies handle accounts when borrowing from individuals?
When borrowing money:
Debit: bank deposit
Credit: Other Payables-Individuals
When repaying:
Debit: Other payables-individuals
Loans: bank deposits
Other payables refer to other payables and temporary receipts except accounts payable, notes payable, accounts received in advance, salaries payable to employees, taxes payable, interest payable, dividend payable and other business activities.
Other payables include rent payable for lease package, deposit received, rent payable for leased fixed assets, rent payable for intangible assets, fines payable, late fees and liquidated damages.
Enterprises should account for the increase and decrease of other payables and their balances through the "other payables" account, and make detailed accounting according to the detailed accounts set by other payables and other units (or individuals). Various payables and temporary receipts registered by the lender of this subject, and various payables and temporary receipts registered by the borrower for repayment or write-off; The ending credit balance reflects other payables of the enterprise.
Accounting entries of loan interest income
If it is a financial enterprise, then the accounting entry of this interest as operating income is:
Debit: bank deposit
Loan: main business income-interest income
If it is a non-financial enterprise, the interest can directly offset the financial expenses.
Debit: bank deposit
Loans: financial expenses-interest income