Financing, in a certain sense, is the behavior and process of companies raising funds. So how do you handle the accounting for corporate financing to purchase trademark rights?

Accounting entries for financing the purchase of trademark rights

Debit: intangible assets (present value) (unpaid principal)

Unrecognized financing expenses (reverse (squeezed) (unpaid interest)

Loan: long-term payable (annual payment × number of years)

Debit: long-term payable

Loan: bank Deposits

Debit: Finance Charges

Credit: Unrecognized Financing Charges

What are Unrecognized Financing Charges?

The content reflected in the "Unrecognized Financing Charges" account is the amount incurred by financing leased assets (such as fixed assets, intangible assets) or long-term borrowings that should be amortized in each period during the lease term. Unrealized financing charges, in other words, are the amortization of interest payments due to financing during the lease term.

The "unrecognized financing charges" account is a liability account and is used as a deduction item for long-term payables when preparing financial statements. That is, in the balance sheet, the "long-term payables" item is represented by "long-term payables". Fill in the balance of the account "Unconfirmed Financing Charges" minus the balance of the "Unconfirmed Financing Charges" account and the amount of long-term payables due within one year.

"Unconfirmed financing expenses" accounts for the unrecognized financing expenses that the enterprise should include in interest expenses in installments. At the same time, detailed accounts should be set up according to the unrecognized financing expenses items for detailed accounting. The debit balance at the end of the period reflects the enterprise's The amortized value of financing charges has not been recognized.

What are financial charges?

Financial expenses refer to the expenses incurred by an enterprise to raise funds required for production and operations.

The "Financial Expenses" account is a profit and loss account, which is used to calculate the financial expenses incurred by the enterprise, and detailed accounts should be set up according to the expense items for detailed accounting.