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Discussion > Accounts >

Journal entry for interest on FD

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[ Scorecard : 595]
Posted On 16 July 2011 at 23:39 Report Abuse

i faced a problem in of our client has passed following journal .he has deposited 12lac for 3 years as fixed deposit with HDFC 31 st march he received intrest statement stating 50000 as intrest accrued on above and 5000being TDS FD value being 12.5 lac..he passed following journal

TSD(receivable)    5000     Dr.

Intrestreceivable  45000    Dr.

   To intrest accrued on FD(indirect income)                         50,000

i found it right but my question is it will affect p/l a/c i heard interest on fd must be capitalized in to FD balance in balance sheet.... if above entry how will it be capitalized????????

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Anshul Shukla
Article assistant

[ Scorecard : 58]
Posted On 16 July 2011 at 23:59

the correct entry is

Interest Receivable A/c Dr.        45000

Advance income Tax (T.D.S) A/c Dr. 5000

  To Interest                                                     50000

And Rs 50000 will be trated as the income of current yr as per AS 9 and interest  receivable will be added in the value of FDR in the balance sheet.

Member (Account Deleted)

[ Scorecard : 595]
Posted On 17 July 2011 at 00:06

ya i think u r right ...i was confused coz i thought 50000 will be added to FD a/c...but actually 45000 only.... coz 5000 is already paid in form of TDS..

m U d I t

[ Scorecard : 93]
Posted On 17 July 2011 at 16:22

hi ,

i think if ur interest is accrued then u must pass this entry...


FD A/c                                Dr.        45000

TDS RECOVERABLE A/c        Dr.          5000

             To INTEREST A/C                                50000

reason being that if interest is accrued then you will not receive such amount until FD is matured (unless it is flexi a/c FD).therefore u must debit FD a/c instead of interest recoverable a/c.

also as instead of advance tax u should credit TDS RECOVERABLE a/c because there is difference between the two.

CA Mohit kumar jain
Searching Source of Money

[ Scorecard : 149]
Posted On 17 July 2011 at 19:11

yes u r correct

it should be on accrual basis 


[ Scorecard : 16671]
Posted On 17 July 2011 at 21:46

the entry is correct. the reason of rs. 45000 to be t/f to fdr ac. is 50000 is accrued and out of this 50000 rs. 5000 is deducted by bank as tds

Anshul Shukla
Article assistant

[ Scorecard : 58]
Posted On 18 July 2011 at 00:06

Its is interest accrued but not received account instead of FDr A/c


[ Scorecard : 1257]
Posted On 18 July 2011 at 13:23

Ya, the entry is correct. When the entries are transferred interest accrued on fd will become interest income and will be in credit side of P&L. Interest receivable gets added up with the FD. TDS goes under the head advances in balance sheet.

Mayank Ahuja

[ Scorecard : 523]
Posted On 18 July 2011 at 15:50

Yaa Mudit is right........

B.Com, ,C.A. Final

[ Scorecard : 1434]
Posted On 18 July 2011 at 18:39

For more ............. please see attached file

Attached File : 408827 772147 book11.xls downloaded 1972 times

Total thanks : 1 times

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