How can i enter a car loan entry in tally?

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 Car Value (Fixed Asset ) = 62930
Interest = 6846
Down payment by Cash = 12590
Balance 57186 as loan
Monthly EMI of Rs 1191 which includes interest
First month installment 927 + 264 = 1191
Second month 923 + 267 = 1191

Kindly describe which are all the accounts need to create under which heads. in tally

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 At the time of purchase:

Car A/c 62930

To Cash: 12590
To Payable : 50340

At Each Month end: (lets say first month)

Interest A/c Dr 264
Payable A/c Dr 927
To Bank 1191

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 Thanks for your replay Sir.
I have one doubt.
The Loan Payable account under which head?
In current Liabilities or Secured Loans?
Should we post the whole interest amount as interest payable ?

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 Thanks for your replay Sir. I have one doubt. The Loan Payable account under which head? In current Liabilities or Secured Loans? Should we post the whole interest amount as interest payable ?

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 well it is a secured loan only...

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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 What about the Interest?
Should we post it as interest Payable or
Post it as indirect expense at the time of bank payment?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 it becomes payable only on month end. you need to follow accrual principle. given that you pay EMI immediately, no need to book payable entry.

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 Purchase of Fixed Asset

(Fixed Asset) Car a/c Dr. 62930
(Current Asst)Deferred Int Dr 6846
To cash 12590
To Loan A/c 57186

While Paying EMI
Loan A/c Dr 1191
To Bank 1191
JV
Interest on Loan Dr 264
To Deferred Interest 264

Is this correct Sir ?

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 what is this deferred interest? why you complicating the entries?

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2014 If u close the company on 31/12/2014. the books must shows the actual liability of the co which includes the liability of the interest payable. So there is a need to show the interest payable. So I put the deferred interest

Nikhil Kaushik

Nikhil Kaushik (Expert)
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29 April 2014 sorry thats not how you do accrual accounting. you book interest as payable on the date on which books are drawn. Interest payable till 31 dec, if not paid, shall be shown as payable.