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Flashcards in Liabilities Deck (6)
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1

Liabilities with Principal at Maturity: Taking out the loan

DR Cash
CR Bank Loan

2

Liabilities with Principal at Maturity: Year after loan was taken out, but has not yet matured

DR Interest Expense
CR Interest payable

3

Liabilities with Principal at Maturity: Year the loan matures

DR Interest payable (last year's interest payable)
DR Interest expense (this year's interest expense)
DR Bank loan
CR Cash

4

Liabilities with Instalment Payments

DR Cash
CR Bank loan
(taking out loan)
DR Interest exp
DR Bank loan
CR Cash
(each year)
as loan gets closer to maturity, blended instalment payments less related to interest and more related to the reduction of the principal

5

Operating line of credit: borrowing

DR Cash
CR Bank indebtedness

6

Operating line of credit: repayment

DR Bank indebtedness
DR Interest expense
CR Cash