Housing loan interest & principle amount paid

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This query is : Resolved

Amit Arora (Querist)

25 March 2015 Dear Sir

Good Evening !

Sir housing loan interest & principle amount paid in a year . Interest should be debited in capital a/c . Entry will be Capital a/c Dr
Housing Loan a/c Cr

what should we do with principle amount.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

25 March 2015 who is the entity and how it is paid?

Amit Arora

Amit Arora (Querist)

25 March 2015 Good evening sir

Business Prop. is entity and paid partly through saving bank a/c and partly paid through daughter's bank a/c

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

25 March 2015 INT WILL go to capital a.c
loan repayment shall be deducted from loan taken in liability side

Loan a/c ...dr
Int on loan a/c...dr
to bank a/c (savings a/c)

Amit Arora

Amit Arora (Querist)

25 March 2015 But Sir someone is saying that Interest on Loan and Principle amount which is paid will debited in capital a/c

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

25 March 2015 how come int paid shall be treated in capital a/c if it is business loan?

Amit Arora

Amit Arora (Querist)

25 March 2015 Sir this is a housing loan

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

25 March 2015 ok in such case for prop business pass the following entry

loan a/c...dr
int on loan a/c...dr
to bank

capital a/c ....dr
to int on loan a/c

Amit Arora

Amit Arora (Querist)

25 March 2015 Sir will Principle amount transfer to capital a/c ?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

25 March 2015 no, as the principle amount shall have to be shown under liabilities side and then keep reducing as and when the amount is paid

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