Accrued interest on fdr accounting

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Ajit Y. Bhobe

Accounts Executive

24 Points Posted on 09 June 2012

Please any body help me in this

In current f.y. 2012-13 Interest received and credited to bank amounts to Rs. 13500 ( Where interest amounts to Rs. 15000 less 1500 tds)

Of this amount of Rs. 15000. interest accured is Rs. 10,000 less tds 1000 net 9000 ( Rs. 9000 interest is of previous year 2011-12

So entry in previous year where interest is added to FDR

FDR A/c Debit Rs. 9000

TDS on FDR Interest Debit. Rs. 1000

Interest on FDR Credit Rs. 10000

What will be the entry in current year

Should I have to credit the entire 13500 to interest Account

TDS on FDR interest Debit 500

Bank A/c 13,500

Interest on FDR ( 9000 Net interest of previous year +5000) credit Rs. 14000

Please advice if it is correct

Ajit Bhobe

Replies (6)

Ashish

Accounting

48 Points Posted on 09 June 2012

you should credit interest on FDR by Rs15000 (10000 + 5000)

Ashish

B.S.SRIMAL

Chartered Accountant

24 Points Posted on 09 June 2012

THE INTEREST SHALL BE CREDITED WITH Rs 15000/

BS.SRIMAL

Kishore Dichwalkar

PRACTICING CHARTERED ACCOUNTANT

41 Points Posted on 10 June 2012

Dear Ajit,

If i read your problem correctly, then you will have to credit interest on fdr account only by Rs.5000/- and debit TDS on Int on FDR by Rs.500/-.

I assume in all you have received interest on FDR Rs. 15,000/- for two years i.e. Rs. 10,000/- in the previous year and Rs. 5,000/- in the current year. TDS Rs. 1,000/- in previous year and Rs, 500/- in the Current Year.

Hope this explaination will solve your querry.

CA Jaspreet Singh Sidana

Chartered Accountant

42 Points Posted on 10 June 2012

Dear Ajit, accordin to me u shud pass the followin entry:

Bank a/c dr - 13500

TDS dr- 500

To Interest on fdr - 5000

To Interest accrued a/c- 9000.

Explainition: since you had passed an entry for accrued interest in the previous yr ..the same shall b reversed in the current year as the amount has been recieved.and balance Rs 5000 is of current yr and shall b credited to profit and loss account as current yr income.

regards,JASPREET