What is interest payable account

What is Interest Payable? Interest Payable is a liability account, shown on a company's balance sheet, which represents the amount of interest expense that has accrued to date but has not been paid as of the date on the balance sheet. In short, it represents the amount of interest currently owed to lenders.

What is interest payable an example of?

Interest payable is a liability, and is usually found within the current liabilities section of the balance sheet.

Is interest payable accounts payable?

Liability accounts include interest owed on loans from creditors—known as interest payable, as well as any tax obligations accumulated by a company, which are known as taxes payable. These are not part of accounts payable. Debt owed to creditors typically must be paid within a short time frame, around 30 days or less.

Is interest payable debit or credit?

Second, interest expense is recorded in the accounting records with a debit, while interest payable is recorded with a credit.

What type of expense is interest payable?

Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any borrowings—bonds, loans, convertible debt or lines of credit. It is essentially calculated as the interest rate times the outstanding principal amount of the debt.