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Interest Schedule

January 13, 2012

What is Debt?

  • Debt is the fund borrowed from one party by the other party i.e. debt is an obligation owed by the borrower of fund to the lender of fund.
  • Debt is not available freely it has a cost called interest expense.
  • Interest expense is the cost paid by the borrower for the use of money he/she has borrowed.
  • Normally, debt has repayment schedule that shows periodic repayment amount which takes care of both principal repayment and interest payment for that particular period.
  • Debt can be in the form of bank loan, bonds, mortgages etc.

Procedure for preparing Debt Schedule and interest Schedule

Step 1: Add the old bonds issued with the new issuance


Step 2: Calculate the interest payment

clip_image003Interest Expense

Interest payment on old bonds

Interest payment on old bonds

Interest payment on new bonds

Interest payment on new bonds

Total Interest Payment- sum the interest payments on both the bonds

Total Interest

Thus, we form our Debt and Interest schedule. We then include this in our Profit and Loss statement along with our Fixed Asset schedule. Finally, now our Profit and Loss statement (or Income Statement) is complete!


You can take a look at the complete Income statement here. Now you can see whether our Chocolates are a sweet deal or not!!

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Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.

Debt debt and interest schedule Financial Modeling interest schedule


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