Accounting entry

your entry is correct and party amount would not  be reduce although will increase by intrest amount.

correct if m wrong 

Thanks

i want to know the journal entries of issue of bonus shares in detail

i want to know the journal entries of issue of bonus shares in detail

Party's a/c will reduce oly if u make payment. Interest entry will increase the balance, because you are supppose the pary the principal amount plus interest. Example loan amt is Rs.100,000, interest @ 10% is Rs.10,000 you should pay him Rs.110,000 (i.e. 100,000 principal + 10,000 interest).

Bonus shares are issued out of the reserves. Dr Reserves a/c & Cr share capital a/c.

Check for the conditions to be satisfied for issuing bonus shares in Companies Act,1956.

Bonus Shares can be issued by capitalizing 'free reserves' and 'securities premium' amount if the other conditions are satisfied.

The entry will be : on sanction

Profit or Loss       A/c                               Dr.

General Reseve A/c                                Dr.

Capital Reserve  A/c                               Dr.

Securities Premium A/c                         Dr.

Capital Redemption Reserve A/c        Dr.

                             To Shareholders' Account

on issue :

Shareholders' A/c                                      Dr.

                              To Share Capital

Note that the first entry is about the order of utilization of reserves. I mean when your profit or loss account gets completely utilised you use the general reserves and so on.

unseured loan Rs.100000/-  interest rate @ 10%

 INTEREST A/C DR   10000/-

TO USECURED LOAN A/C ( PARTY NAME)    10000/-

PARTY NAME A/C DR 1000/-

TO TDS PAYABLE A/C         1000/-

or

INTEREST A/C DR. RS 10000/-

 TO PARTY NAME A/C   RS. 9000/

TO TDS PAYABLE A/C  RS.1000/-

NEXT FINANCIAL YEAR 

TDS PAYABLE A/C DR RS. 1000/-

TO BANK A/C

AS PER CHALLAN DEPOSITED  281

PARTY FULL AND FINAL PAYAMENT THAN

PARTY NAME A/C DR RS.109000/-

TO BANK A/C RS.             109000/-

Agree with Jeevraj. The entries which are made by Jeevraj is the right treatment of Unsecured loan.

COMPANY HAS INVESTED IN SBI MUTUAL FUNDS WHICH EARNS DIVIDEND.  DIVIDEND IS ALSO REINVESTED.  AT THE END OF THE YEAR HOW TO PASS NECESSARY ENTRY IN OUR BOOKS OF ACCOUNTS.  THE BOOKS OF ACCOUNTS ARE MAINTAINED IN TALLY. REQUEST YOUR HELP IN  RESOLVING THE ISSUE.

M K RAMACHANDRA