Interest on asset
This query is : Resolved
Chintan Patel
(Querist)
18 December 2011
what will be the journal entry for interest earned on an asset and why?
as per my books it is
ASSET A/C....DR
TO INTEREST A/C
HERE INTEREST IS NOMINAL A/C, SO IT IS CREDITED BUT WHY IS ASSET IS DEBITED???
HERE BY EARNING INTEREST, THE VALUE OF THE CONCERNED ASSET IS NOT INCREASING THEN WHY IT IS DEBITED???
as per my books it is
ASSET A/C....DR
TO INTEREST A/C
HERE INTEREST IS NOMINAL A/C, SO IT IS CREDITED BUT WHY IS ASSET IS DEBITED???
HERE BY EARNING INTEREST, THE VALUE OF THE CONCERNED ASSET IS NOT INCREASING THEN WHY IT IS DEBITED???
CMA Ramesh Krishnan
(Expert)
18 December 2011
Interest received on asset is revenue income. so you can dr:party or cash and cr:Interest received a/c
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