Liability-principal & interestForums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Liability-principal & interestThis topic has 1 reply, 2 voices, and was last updated 8 years ago by MikeLittle.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts June 28, 2017 at 7:52 pm #394291 nariMemberTopics: 261Replies: 176☆☆☆Hello MikeMy question is this:If an entity borrows 100,000 from the bank, but the interest on the loan is 20,000, would the total liability in the balance sheet be 120,000 or would it be the 100,000 only? If it is 100,000 then how is teh 20,000 treated? June 28, 2017 at 7:56 pm #394292 MikeLittleKeymasterTopics: 27Replies: 23329☆☆☆☆☆Dr Cash $100,000 Cr Loan / Bank Loan / Bank Overdraft $100,000Interest of $20,000?Either:Dr Finance costs $20,000 Cr Cash $20,000orDr Finance costs $20,000 Cr Loan / Bank Loan / Bank Overdraft $20,000OK?AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)The topic ‘Liability-principal & interest’ is closed to new replies.