Please tell me interest received on loan journal entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2015 I had given loan of Rs.1000000 to a company.Co.gives interest of Rs.10000. SO today i have received a cheque of Rs.1009000 (after deducting tds).
Please tell me whether following entry is correct:-
Bank Dr.........................1009000
TDS on Interest.................1000
To Loan............................1000000
To Interest received on loan.......10000

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 March 2015 your entries are correct. just mention in the TDS on interest as " TDS receivable on interest" to make clarity

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Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2015 But some old accountants are saying the following entries:-
Co. Dr.......................9000
TDS on interest..............1000
To Co...............................10000

Bank Dr........................1009000
To CO................................1009000

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 March 2015 both the way entries are correct and give the same effect. he may suggest due to track the TDS receivable with partywise. you can choose any one option

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