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Bank Balance Sheet Borrower’s Loan Interest Payment

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An earlier comment asked how to account, on a bank’s balance sheet, for a loan interest payment made to the bank.
I did some reading to find out what terminology and methodology the industry uses.
The answer is “Retained Earnings”. A payment to the bank made from a positive deposit account on the banks balance sheet reduces that account and the retained earnings entry for the bank is increased. Then the bank capital is specifically the sum of the record of contributions paid in by share holders plus the retained earnings figure.
For example BIS Basel 3

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Posted by Dinero
Posted on 07/12/2017 6:36 AM
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Private answer

Yeah, interest income is just that – income. Drops to the retained earnings line after accounting for expenses.

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Cullen Roche Posted by Cullen Roche
Answered on 07/12/2017 12:56 PM
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