Accrued interest

This query is : Resolved

uday singh Negi (Querist)
Follow

17 October 2012 Dear sir,
Suppose company take loan & they paying interest on them,
If company not paid that much interest so interest payable should add back to principal or we have to show this amount as interest payable separately because next time interest calculation should be on principal or principal + interest?

In second condition vice versa

2) if loan given by company / or financial institution etc, to any other company or firm so in this case interest receivable also add to principal or it would be shown interest receivable separately

Because one of my professor said that interest payable should add to principal but interest receivable should not add back to principal is this true if true, which accounting standard or policies said that
Expert pls reply

CA Parul Saxena

CA Parul Saxena (Expert)
Follow

17 October 2012 Next time interest calculation is not the basis of entry of interest in accounts. It has to be recorded irrespective of the fact that whether next time interest would be on principal+interest or principal only.
For Interest payable:-
Interest A/c Dr........xxx
To Interest Payable..........xxx
next time interest calculation:-
Interest A/c Dr.(as per terms and comdition)
To Interest Payable..........xxxx
Similar is the case of Interest receivable.

uday singh Negi

uday singh Negi (Querist)
Follow

17 October 2012 in balance sheet presentation of interest payable should shown separate or it will be add to principal for interest payable

CA Parul Saxena

CA Parul Saxena (Expert)
Follow

17 October 2012 Presentation should be like this on Liabilities side:-
Loan taken from vendor name/Financial Institution
Principal...........................xxx
(+)Interest Payable.................xxx

uday singh Negi

uday singh Negi (Querist)
Follow

17 October 2012 as per new revised schedule vi

loan ( short term or long term ) has different head

and interest receivable & payable has different head

interest receivable (under unsecured advances )

interest payable (other current liabilities )

how will you show

principal xxx
(+) interest xxx

pls. reply

thanks

CA Parul Saxena

CA Parul Saxena (Expert)
Follow

18 October 2012 You can show principal amount as Non-Current item and interest Receivable/payable as current item.......

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

deepak

Hemkumar

AMAR MEHARWADE

Tanishka Khandelwal

kesav

Subscribe Now

Accrued interest

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA