We have a loan payable (long term liability). The interest is due in several years (i.e., a ballon payment). I recorded the interest accrued for this year in the interest payable account (liability), but it did not show up on the balance sheet without me also entering the interest as though I had paid it, in which case it showed up as an expense on the P&L. It is my understanding that the interest is either a liability (balance sheet entry) or an expense (P&L entry), but not both. How do i enter the interest as accrued interest for this year and have it show up on the balance sheet as an interest payable liability but not a current year expense?
if you owe someone money, that is a payable. You owe them that money for a reason, that is the expense (or an asset if you buying equipment as an example)
so yes, you increase a payable and that also increases the expense.
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