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.

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..

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.

yes u r correct

it should be on accrual basis 

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

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

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.

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

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

The correct entry will be as follows-

ACCRUED INTEREST ON FDR A/C       Dr.           45000

TDS RECEIVABLE A/C                               Dr.           5000

          TO INTEREST ON FDR A/C                                            50,000

FDR AMOUNT REMAINS FIXED TILL MATURITY SO CANNOT DR. FD A/C TILL MATURITY.

ON MATURITY OF FDR FOLLOWING ENTRY WILL BE PASSED-

BANK A/C     Dr.               13,00,000

   TO FDR A/C                                                12,50000

   TO ACCRUED INTEREST ON FDR A/C        50,000

THIS IS THE TOTALLY CORRECT WAY FOR FDR OR NSC OR PPF

the interest on FD gets capitalized at end of every year wtih original after TDS, and then the depositor gets interest on gross amount ( FD principal+ interest credited after TDS), hence its always preferred to increase the FD value by interest amount, in place of creating "interest receivable" 

AS INTEREST ON FDR IS RECEIVED ONLY AFTER MATURITY OF FDR SO WE HAVE TO SHOW INTEREST ON ACCRUAL BASIS SO U CANNOT JUST ADD THE INTEREST AMOUNT IN FDR.

Originally posted by : rahul
	The correct entry will be as follows-   ACCRUED INTEREST ON FDR A/C       Dr.           45000 TDS RECEIVABLE A/C                               Dr.           5000           TO INTEREST ON FDR A/C                                            50,000   FDR AMOUNT REMAINS FIXED TILL MATURITY SO CANNOT DR. FD A/C TILL MATURITY.   ON MATURITY OF FDR FOLLOWING ENTRY WILL BE PASSED-   BANK A/C     Dr.               13,00,000    TO FDR A/C                                                12,50000    TO ACCRUED INTEREST ON FDR A/C        50,000   THIS IS THE TOTALLY CORRECT WAY FOR FDR OR NSC OR PPF

Yes sir is right because we cannot DR. FDR A/c 

we have to DR. interest accured a/c

BY MISTAKE I  CREDITED ACCRUED INTEREST A/C BY 50,000 INSTEAD OF 45000  SO ON MATURITY OF FDR THE CORRECT ENTRY WILL BE AS FOLLOWS-

BANK A/C Dr. 12,95,000

   TO FDR A/C                                                        12,50,000

  TO ACCRUED INTEREST ON FDR A/C                    45,000