Interest on NSC

This query is : Resolved

Gopal Sahani (Querist)
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24 September 2009 Dear expert,
Please inform Accounting entry of Accrued Interest on NSC with present rate, If we purchased NSC of RS. 20000/- on 27.11.08.
What entry will be with amount on 31.03.10
wheather any entry would be passed on its complition of one year.
Expecting for your cooperation.

Kapil Arora

Kapil Arora (Expert)
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24 September 2009 As on 31.3.2009
NSC,,,Dr--1632
Interest on NSC..Cr--1632
As on 31.3.2010
NSC,,,,Dr--1766
Interest on NSC,,Cr--1766

Ratan Sharma

Ratan Sharma (Expert)
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24 September 2009 Entry should be

Interest accrued on NSC A/c. dr
To Interest account

Do not disturb the original NSC account otherwise after 2-3 years you will not be in a easiest position to find out the original amount of NSC and interest accrued thereon.

As the interest is accrued at the year end this entry has to be passed in the books of accounts to book the interest.

Gopal Sahani

Gopal Sahani (Querist)
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25 September 2009 Thanks Mr. Ratan,
By what amount the entry will be passed on 31.03.10?
Wheather any entry would be passed on complete of one year i'e on 27.11.09 ?

Thanking you again.

Ratan Sharma

Ratan Sharma (Expert)
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25 September 2009 Yes interest has to be calculated for 1 year as on 31.3.10. No need to pass any entry on 27.11.2009

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