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Ravishankar K (Accountant)     09 May 2011

Accrued Int and Real Interest recd entries

Dear Friends,

We have one FD for which on 31 march based on the accrued interest and TDS deduction from Bank,  we did the journal  entry as follows:

Dr ........ Accrued Int ....... 13562.44

Dr.......... TDS .................. 1507

Cr ............ Interest on TDR / FD  ------    15069.44

 

Now on 02 May we had to prematurely close the FD and received the closed FD statement as follows from Bank.

Cr..            FD Amount already present / FD Value           1000000
Cr ..........            Interest                                                          12329

Dr...........                                        TDS                                     274.00

Dr.. FD premature close transfer to SB Ac. 000099       1012055.00

 

Now tell me what should be my entry now....

 

 



 7 Replies

Venkat

Venkat (Accountant)     09 May 2011

The easiest way is to reverse the entry which was already passed in Mar-11 and pass the following entry for the actual receipt:)

 

Dr Bank                          1012055.00

Dr TDS    [1507+274]          1781.00

Cr Interest [1507+12329]                        13836.00

Cr FD                                                      1000000.00

[But not sure how the bank has deducted odd % of TDS]

1 Like
Ravishankar K

Ravishankar K (Accountant)     09 May 2011

Thank you very much but can you tell on what date to pass the reversal entries, :P , and how exactly to pass the reversing entry,,, because in this journal entry of 31 mar 2011 it is already shown that an amount of 15069.44 is recd as income, or to make it more clear, let me give u the account type / head of my entries done

 

Accrued interest ------- Current Assets

Interest on TDR ----- direct  incomes

TDS  ---------------   TDS for us is current assets, as we get exemption later from IT office...

 

Please suggest me,

 

 

 

 

 

 

Venkat

Venkat (Accountant)     09 May 2011

You have to reverse the entry in the current FY (May-11) as 31-Mar Entry is based on the TDS certificate from Bank (I hope so!!!). 

I understood the grouping which was given by you and I also presumed that this would be your further query. If you pass reversal entry in the current FY, interest received will show a negative amt!!!

We can't help it at the time being. But over the period of the time this negative amount will be set off against bank int., if any during the current FY.

U S Sharma

U S Sharma (glidor@gmail.com)     09 May 2011

in case of premat fd encashment bank reduce the rate of int, but TDS deducted earlier get effective, also bank trasfer the full interest to client and then reverse the premat charges as premat penalty, so the TDS figures always get high, however it does not matter for the person receiving the interest and TDS certificate. as department is aware of such practice of private banks.

satish kumar

satish kumar (accountant)     13 June 2011

on 31st march

Dr ........ Accrued Int ....... 13562.44

Dr.......... TDS .................. 1507 (if TDS dedcuted by bank)

Cr ............ Interest on TDR / FD  ------    15069.44

on 2nd may

Cr..            FD Amount already present / FD Value           1000000

Cr .......... Acured  Interest                                                          13562.44

 Dr          nterest on TDR / FD  (15069.44-12329)               2740.44                         

Cr...... TDS     (1507-274)                                                                             1233

DR bank a/C                                                                         112055

sachin singh

sachin singh (accountant)     20 April 2016

Agree with Mr. @ satish Kumar

Ayushi Arora

Ayushi Arora   27 February 2021

accrued interest ------- Current Assets Interest on

TDR ----- direct incomes

TDS  ---------------   TDS for us is current assets

as we get exemption later from IT office...  

 


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