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Debt Part 3
When to use
When constructing a basic Financial Model.
- To calculate the control account for interest payable the following rows need to be calculated:
- Opening debt – which shows is linked from row 214
- Days in period
- Days in standard year
- Proportion of year =MIN(Days_In_Period/Days_in_standard_year,1)
- Interest is found by multiplying the opening debt by the proportion of the year by the interest rate =J223*J221*J227
- The control account can now be calculated
- The opening interest payable is the closing balance from the previous period
- Interest expense is from row 229 calculated above
- Interest payable is the negative opening interest payable
- Closing interest payable is the sum of the above
The control account can now be entered into the Financial Statements:
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