Interest expense for closed S-Corp

[LouD]

New client closed down a 2 shareholder S-Corp in 2007 and previous tax preparer filed a final return for that entity.

Client set up his new single shareholder S-Corp in January 2008 doing the same busines activities - just doing them withhout the previous shareholder.

There was debt on the books at the end of 2007 that is still being repaid and the client has put this debt on his new company's books and the related principal and interest.

Should this debt be on the books of the new S-Corp and the related interest? Or is this something that the owner should be handling separately on his personal return somehow?

Thanks in advance