Harborline Trading — Balance Sheet

A bank loan, and interest owed but not yet paid

Harborline Trading Inc. issues shares, borrows from a bank for five years, buys equipment, buys inventory entirely on credit, sells half of it, pays an operating expense, pays loan interest in cash — and then accrues a further 8 of interest expense it hasn't paid yet.

Accruing interest is different from paying it: the expense is recognized as soon as it's incurred, even before cash goes out the door, and the unpaid amount sits on the balance sheet as Interest Payable — a liability — until it's actually settled.

Using the calculator

1. Fill in the yellow inputs — shares issued, the bank loan received, PP&E, inventory (cost + cash paid), the sale (% sold, revenue, cash received), and the operating expense.
2. Accounts Payable, Retained Earnings, and both liability totals recalculate automatically as you change any input.
3. Check the balance sheet's Difference row reads zero.