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LM537
Level 2

Property Loan Pay-off

We paid off the loan on the property. 

Instruction for payoff includes accrued interest, prepayment premium. 

can I record accrued interest as interest expense? 

how to record prepayment premium?

Thank you

1 Comment 1
Varner69
Level 1

Property Loan Pay-off


@LM537 wrote: TargetPayandBenefits

We paid off the loan on the property. 

Instruction for payoff includes accrued interest, prepayment premium. 

can I record accrued interest as interest expense? 

how to record prepayment premium?

Thank you


From the perspective of the buyer, a prepayment is recorded as a debit to the prepaid expenses account and a credit to the cash account. When the prepaid item is eventually consumed, a relevant expense account is debited and the prepaid expenses account is credited.

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