How to treat reinvestment from interest income
This query is : Resolved
14 February 2014
When interest is reinvested without crediting.As both principal + interest.what is accounting entry???????
14 February 2014
well for accounting and tax purposes, you need to route it through P&L account first.
So first entry shall be
Accrued Interest A/c Dr
To Interest on FD A/c
Later you can transfer Accrued Interest A/c to FD
Bank FD A/c (A/c No) Dr
To Accrued Interest A/c
So first entry shall be
Accrued Interest A/c Dr
To Interest on FD A/c
Later you can transfer Accrued Interest A/c to FD
Bank FD A/c (A/c No) Dr
To Accrued Interest A/c
14 February 2014
hi nikhil:-when it is reinvested, whether it have effect in p&l after transferring to FD
14 February 2014
see you have already given effect to P&L. when you transfer from accrued interest to FD, the transaction wont get routed through P&L.
14 February 2014
so the interest portion will not get reduced from interest on fd a/c???
14 February 2014
And also ur telling for Accrued interest, what about if fd matured and then interest and principal is reinvested, when reinvesting like that interest portion which already credit in P&L get reduced ah? give me the journal entry for this issue?
14 February 2014
Interest on FD A/c is to be charged to Profit & loss account and expensed out. it is a nominal account.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
