Interest Expense: debit or credit?
Interest Expense increases on the debit side and decreases on the credit side: its normal balance is a debit.
Expenses reduce equity through the costs of running the business. They increase with a debit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | Interest Expense |
| Spain (PGC 2007) | 662 Intereses de deudas |
| France (PCG 2025) | 6611 Intérêts des emprunts et dettes |
| Germany (generic accounts) | Zinsaufwendungen |
Practice entries that use this account
- Paying a loan installment: principal plus interest
- Paying quarterly interest on a bank loan
- Accruing interest on a bank loan at year end
- Paying a note with interest at maturity
- Receiving a bank loan with a discount (Disagio)
- Paying a loan installment: splitting interest and principal
- Accruing interest on a note payable at year end