indenture (plural indentures) (law) A contract which binds a person to work for another, under specified conditions, for a specified time (often as an apprentice). (law) A document, written as duplicates separated by indentations, specifying such a contract. An indentation. (Can we add an example for this sense?) Translations
What is an 'Interest Expense'. The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any type of borrowings â bonds, loans, convertible debt or lines of credit. It is basically calculated as the interest rate times the outstanding principal amount of the debt. Interest expense on the income statement represents interest accrued during the period covered by the financial statements, and not the amount of interest actually paid over that period.
Interest Payable. Assume that interest is paid on the loan each quarter. The company will accrue interest expense each month in the amount of $133, the annual interest calculated in step 3 divided by 12 months. The entry to accrue monthly interest will be made each month as follows: Debit Interest Expense 133 Credit Interest Payable 133.