Tenax Therapeutics' (TENX) CEO John Kelley on Q3 2015 Results-Earnings Call Transcript.
Debit the cost of the asset and credit the loan account with the capitalized interest. In the example, debit the asset cost and credit the loan account with $50,000. The asset cost available for depreciation at the end of Year One is therefore $1,050,000. Debit the interest expense account and credit the loan account with any interest paid in excess of the interest capitalized. For example, if the total interest paid in the first year was $75,000, debit the interest expense account and credit the loan account with $75,000 minus $50,000, or $25,000.
For both stock- and cash-type dividends, the debit and credit system uses two separate accounts for each financial transaction. This means that cash or stock dividends paid appear as a debit in the retained earnings category of a balance sheet, and appear as a credit under the shareholder equity category. In effect, a companyâs net retained earnings appear on the statement of retained earnings after deducting shareholder equity amounts.