indenture (plural indentures) (law) A contract which binds a person to work for another, under specified conditions, for a specified time (often as an apprentice). (law) A document, written as duplicates separated by indentations, specifying such a contract. An indentation. (Can we add an example for this sense?) Translations
What it is: Interest expense is the cost of money. Interest expense is recorded on the income statement. Let's assume you need $500,000 to buy a house. The price of borrowing that money is interest, and it is expressed as a percentage of the amount of money you obtain.
That means interest expense often changes over time. In banking relationships, when a person deposits money in a savings account or certificate of deposit, the person is acting as a lender to the bank and thus receives interest from the bank. In this case, it is the bank that incurs the interest expense. From an accounting perspective, it is important to remember that interest expense isn't always the exact amount of money physically paid to a borrower in the accounting period.