What
is borrowing Cost?
Borrowing cost is
primarily the interest cost incurred for the borrowing of funds. For example if
entity borrows $ 100,000 and interest rate is 10%, then borrowing cost for the
organization is $ 10,000.
What
is Journal entry for borrowing Cost?
Borrowing cost recognized
as expense in the books of account. The journal entry of above example would be
as under.
|
Date
|
Particulars
|
Dr
|
Cr.
|
|
|
Borrowing
Cost
|
10,000
|
|
|
|
Cash
|
|
10,000
|
