The portion of the balance in Loans to Employees that will be due within one year of the balance sheet date is reported as a current asset. The portion of the balance in that account that is not due within one year of the balance sheet date will be reported as a long term asset.
Interest on the loan should be accrued by the company and reported as other revenue. The company's entry to accrue interest is a debit to the current asset Interest Receivable and a credit to Interest Revenue.
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