At the stop of every month, make an hobby payable journal entry by means of debiting the month-to-month pastime cost to the activity price account in an adjusting entry in your records.
A debit increases an fee account. This fits this fee to the correct month.
First, pastime expense is an expense account, and so is referred to on the earnings statement, whilst hobby payable is a liability account, and so is mentioned on the balance sheet. Second, hobby expense is recorded in the accounting records with a debit, while activity payable is recorded with a credit.
Interest expense is a debit. This is because fees are constantly debited in accounting. Debits increase the stability of the activity price account.
Learn more about interest expense journal entry here:
