Interest
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 November 2014
MY CLIENT HAS TAKEN A MORTGAGE LOAN..FOR ADVANCE AGAIN SHOP .. SO I WANT TO KNOW INTEREST WILL CONSIDER IN P&L OR CAPITAL A/C..
17 November 2014
It depends for which purpose loan is taken.
If it is taken for the purpose of business only then it has to be charged to P&L A/c., and if it is taken to meet personal expenditure (not for business) then it will be debited to Capital account.
Thanks.
If it is taken for the purpose of business only then it has to be charged to P&L A/c., and if it is taken to meet personal expenditure (not for business) then it will be debited to Capital account.
Thanks.
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 November 2014
THANKS SIR BUT I WANT TO KNOW SHOP ALWAYS FOR BUSINESS PURPOSE .. AND THE LOAN IS MORTGAGE.. SO CAN I TAKE IT IN P & L OR NOT
17 November 2014
Dear Friend,
It is not the property that is given as a security which decides treatment of the expenditure, it is the purpose of the loan only which will decide where it has to be charged.
Even though the property given as a security is business asset, but if the loan is utilized for the purpose other than business purpose then it will not be debited to P&L A/c.
It is not the property that is given as a security which decides treatment of the expenditure, it is the purpose of the loan only which will decide where it has to be charged.
Even though the property given as a security is business asset, but if the loan is utilized for the purpose other than business purpose then it will not be debited to P&L A/c.
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