Interest on NSC

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Gopal Sahani (Querist)
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16 April 2009 Dear experts,
Firm has taken a NSC in Oct'08.
For the purpose of finalization of A/c it requires rate of interest which will be imposed on it. Is there need to obtain any certificate for the same, if yes from where can be obtained, also inform the reqiured Journal entries.

Thanking You

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 April 2009 No need to obtain certificate. The interest for the first completed year is Rs.8.16 per NSC of Rs 100/-.According to me, since first completed year falls on october 2009, no need to provide interest as on 31/3/2009. If you prefer to provide proportionate interest journal entry will be

Interest accrued but not due a/c Dr
To Interest on NSC
(Being interest from oct 08 to
mar 09 provided)

Gopal Sahani

Gopal Sahani (Querist)
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16 April 2009 Thank You Sir,
If I prefer to provide interest journal entry,what entry will be passed on Oct'09 and on 31 March 2010. While NSC value is 20000/-

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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16 April 2009 First of all agree with expert and as a answer yo your question.

on actual receipt of interest:

Bank A/c___________________Dr.
____To Interest Received A/c.
____To Interest accrued but not due A/c

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