Entry in balance sheet for loan taken on fixed deposit

Neeraj Desai (Accountant) (53 Points)

01 August 2017  

A firm has a Fixed Deposit of Rs 20,00,000.00, on which they have taken a loan of Rs 16,00,000.00

In the Balance Sheet, do we have to show

Asset of 20,00,000.00 and Liability of 16,00,000.00, or

Asset of 4,00,000.00 and Liabilty of 16,00,000.00 (since 16,00,000.00 loan is taken and is no longer an asset)