**Journal Entry of Paid Interest on Mehboob's Loan**

**Introduction:**
In this journal entry, we will discuss the process of recording the payment of interest on a loan taken by Mehboob. The entry will highlight the necessary steps and provide a detailed explanation of each element involved.

**Step 1: Determine the Loan Terms**
Before recording the interest payment, it is essential to have a clear understanding of the loan terms. These terms include the interest rate, the loan amount, the repayment schedule, and any other relevant details.

**Step 2: Calculate the Interest**
Once the loan terms are determined, the interest amount needs to be calculated. This can be done using the formula:
Interest = Principal x Interest Rate

For example, if Mehboob borrowed $10,000 at an annual interest rate of 5%, the interest for a specific period can be calculated as follows:
Interest = $10,000 x 5% = $500

**Step 3: Identify the Accounts**
To accurately record the interest payment, you need to identify the relevant accounts involved. In this case, the following accounts are typically affected:
1. Interest Expense: This account represents the cost of borrowing the money and will be debited.
2. Cash: This account reflects the payment made and will be credited.

**Step 4: Record the Journal Entry**
Now that the loan terms, interest amount, and accounts are identified, the journal entry can be recorded. The entry should be made in the general journal and include the date of the transaction.

**Example Journal Entry:**
Date: [Date of Payment]

| Account | Debit ($) | Credit ($) |
|------------------------|-----------|------------|
| Interest Expense | 500 | |
| Cash | | 500 |

**Explanation of the Journal Entry:**
- The debit to the Interest Expense account reflects the increase in the expense due to the payment of interest.
- The credit to the Cash account represents the outflow of cash from Mehboob to cover the interest payment.

After recording this journal entry, the Interest Expense account will reflect the total interest paid by Mehboob over time, while the Cash account will show the reduction in available funds due to the payment.

**Conclusion:**
Recording the payment of interest on Mehboob's loan involves calculating the interest amount, identifying the relevant accounts, and recording the transaction in the general journal. This journal entry accurately reflects the impact of the interest payment on Mehboob's financial records.

Paid interest to mahboob