Loan from Mr Rajan A/c Dr. 20000.
Interest on Loan A/c. Dr. 3600

To Cash A/c. 23600

Journal Entry for Repaid Loan Taken from Mr. Rajan Including 18% Interest

When a loan is taken and repaid with interest, it is important to record the transaction in the books of accounts. The following journal entry can be made for a loan of 20,000 taken from Mr. Rajan with 18% interest:

Date | Particulars | Debit Amount | Credit Amount
---- | -----------| ----------- | -------------
[Date of Repayment] | Mr. Rajan's Loan Account | 20,000 |
| Interest on Loan Account | 3,600 |
| Bank Account | | 23,600

Explanation:
1. Debit the Mr. Rajan's Loan Account:
The loan account is debited to reduce the outstanding balance of the loan. The amount debited is the principal amount of the loan, which is 20,000.

2. Debit Interest on Loan Account:
Interest on the loan is calculated at the rate of 18% per annum. The interest amount is calculated as follows:

Interest = Principal x Rate x Time
Time = (Number of days elapsed from the date of disbursement to the date of repayment) / (Number of days in the year)

Assuming that the loan was disbursed on January 1, 2021, and repaid on March 31, 2021, the interest for 90 days (January, February, and March) would be calculated as follows:

Interest = 20,000 x 18% x 90/365 = 880

Therefore, the Interest on Loan Account is debited for 880.

3. Credit Bank Account:
The Bank Account is credited with the total amount of 23,600, which includes the principal amount of 20,000 and the interest of 3,600.

Conclusion:
By making the above journal entry, the loan account balance is reduced, and the interest expense is recognized in the books of accounts. The Bank Account is credited with the total repayment amount, which represents the outflow of cash from the business.