Interest expense is an income statement account which is used to report the amount of interest incurred on debt during a period of time.
To illustrate the difference between interest expense and interest payable, let's assume that a company has $300,000 of debt with interest at 8% per year. The company pays the monthly interest as required, which is 15 days after each month ends. The loan began on January 2 of the current year. If the company's accounting year ends on December 31, the amount of interest expense for the year will be $24,000 ($300,000 x 8%). The amount of interest payable at December 31 will be December's interest of $2,000 ($30,000 x 8% x 1/12). The interest payable of $2,000 will be reported as a current liability since it is due within 15 days of the balance sheet date.