Treatment of fixed deposit

This query is : Resolved

Mahesh sharma (Querist)
Follow

18 May 2013 Dear sir
Please tell me about what are the accounting for FD in bank if Interest are compounded and TDS is deducted by bank on interest.interest are not received but the value of FD is increase by the interest value.
Tell the entries for TDS

CA rohit swami

CA rohit swami (Expert)
Follow

18 May 2013 HELLO,
FOLLOWING ENTRIES ARE DONE FOR F.D.R:-
F.D.R.A/C DR. 100000
TO CASH/ BANK 100000
(PUR. OF F.D.R FROM BANK/CASH)

ACCURED INTEREST A/C DR. 7000
TO INTEREST ON FDR 7000
(ACCRUED INTEREST ON FDR AS PER BANK CIRTIFICATE)

ACCRUED INTEREST LEDGER CREATED UNDER CURRANT ASSETS AND INTEREST ON FDR LEDGER UNDER INDIRECT INCOME.

I THINK YOU UNDERSTAND ALL ENTRIES.
REGARDS:-C.A ROHIT SWAMI