Interest on moratorium of loan
This query is : Resolved
25 May 2020
Dear Sirs,
We have taken a loan from NBFC. As the lending institutions have been permitted to allow a moratorium of three months due to COVID 19, our lender has amortised the interest payable for Mar20 to Jun20. The Interest portion is added to the outstanding loan amount.
My query is:
1. What accounting entry should be passed.
2. Whether TDS is applicable in Interest portion. The lender had added the total Interest to loan outstanding.
Kindly advice.
We have taken a loan from NBFC. As the lending institutions have been permitted to allow a moratorium of three months due to COVID 19, our lender has amortised the interest payable for Mar20 to Jun20. The Interest portion is added to the outstanding loan amount.
My query is:
1. What accounting entry should be passed.
2. Whether TDS is applicable in Interest portion. The lender had added the total Interest to loan outstanding.
Kindly advice.
25 May 2020
1. Interest Expense - Dr.
Lender A/c - Cr.
2. No TDS needs to be deducted from Interest Amount
Lender A/c - Cr.
2. No TDS needs to be deducted from Interest Amount
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