Question

When a company pays tax installments during the current financial year, which account does this transaction fall under in the transaction analysis worksheet? Specifically, the cash on hand, trade receivables, inventory, other current assets, PPE, trade payables other current assets, borrowings, contributed equity, income & expense.

Answer 1

Here in the Case if company pays off the interest liability during the current financial year, it will hit the account Other Current liabilities and if it paid in cash then cash on trade will also get a hit.

Interest expenses A/c Dr.

To Interest Payable A/c

( Being Interest expenses recorded during the year)

Balance sheet position

Liability	Amount	Assets	Amount
Current Liability / Other Current Liability
Interest Accrued( Interest on X Item)	XXX

When Interest expenses is paid off journal entry will be ( If same is paid in Cash)

Interest Payable A/c Dr.

To Cash on Trade A/c

( Being Interest expenses paid during the year)

Liability	Amount	Assets	Amount
Current Liability / Other Current Liability
Interest Accrued( Interest on X Item)	(Interset expenses will be after deduction of interest expenses paid off during the year. )	Cash on Trade	(Will be shown after deduction of interest expenses paid off during the year. )