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Monday, 12-Mar-2012 11:31 Email | Share | | Bookmark
Interest Schedule

Interest Schedule

What is Debt?

Debt? is the fund borrowed from one party by the other party i.e. debt is an obligation owed by the borrower of fund to the lender of fund.
Debt? is not available freely it has a cost called interest expense.
Interest expense is the cost paid by the borrower for the use of money he/she has borrowed.
Normally, debt has repayment schedule that shows periodic repayment amount which takes care of both principal repayment and interest payment for that particular period.
Debt? can be in the form of bank loan, bonds, mortgages etc.
Procedure for preparing Debt Schedule and interest Schedule
Step 1: Add the old bonds issued with the new issuance
Step 2: Calculate the interest payment
Interest payment on old bonds
Interest payment on new bonds
Total Interest Payment- sum the interest payments on both the bonds
Thus, we form our Debt and Interest schedule. We then include this in our Profit and Loss statement along with our Fixed Asset schedule. Finally, now our Profit and Loss statement (or Income Statement) is complete!
Whew!!
You can take a look at the complete Income statement here. Now you can see whether our Chocolates are a sweet deal or not!


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