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.
Credit and debit are the two fundamental aspects of every financial transaction in the double-entry bookkeeping system. Define how the terms debit and credit are used in accounting. The English words credit and debit come from the Latin words credre and debere, respectively. Credre means to entrust, and debere means to owe.