Home Investing Dictionary Investment Term Interest Payable
Interest Payable
Written by Kenny Foo   
Wednesday, 04 March 2009 10:42

Interest payable or interest expense is the amount of interest the company owes to other parties as the date due on the end of one financial period. When a company borrow money from other parties, they need to pay interest to other parties for the service of having lent money and the associated risk. The amount of interest payable or interest expense will be depends on the amount of money had been borrowed by the company, the level of risk for this loan, and the length of repayment time. Interest payable or interest expense will be deducted from revenue in Income Statement to obtain net profit for a financial period. Besides, interest payable or interest expense will appear in balance sheet as one of the current liabilities.

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Last Updated ( Tuesday, 10 March 2009 10:39 )
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