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Interest suspense in balance sheet

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This query is : Resolved

ravi n (Querist)
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23 December 2011 Only loan and installments are given in HDFC Bank Installment, Can we arrive the interest by differentiating the total loan and installment. the same interest amount keep as `interest suspense A/c' under the heading of `miscellaneous asset'. this method of accounting is right or wrong. and weather this expenses come under Accounting standards.

CA. RAGHAV GARG

CA. RAGHAV GARG (Expert)
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24 December 2011 Dear Mr. Ravi,

To be very frank, it is difficult to understand your question.

But if you have only 1 loan and paying its installment, you can :

1. Collect Interest certificate from Bank.

or

2. your inerest will be = Closing Balance of Loan - Opening balance of loan + total installments.

As per Mercantile method, normal accounting entry of

Interest on Loan A/c Dr.
To HDFC Loan A/c

is to be passed.

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