fD entries

FD CREATED :

Prepare a Ledger as "FIXED DEPOSIT A/c No: XXXX - Under Deposits/ Current Asset"

Deposit Entry in Payment :

Dr. Fixed Deposit A/c - Rs. XXXXX

Cr. Bank A/c - Rs. XXXXX

(Being Deposit New FD account from xxxx to xxxx)

Journal for Interest :

Dr. Fixed Deposit A/c - Rs. XXX

Cr. Interest on Fixed Deposit - Rs. XXX

(Interest on Fixed Deposit under "Income Head")

Receipts :

If total matured amount

Cr. Fixed Asset A/c - Rs. XXXXXX

Dr. Bank A/c - Rs. XXXXXX

(Being Received FD account closure proceeds and amount to Bank)

If only received Interest :

Cr. Fixed Asset A/c - Rs. XXX

Dr. Bank A/c - Rs. XXX

(Being Interest received on FD)

Journal Entry for TDS on Interest Income:

Applicability: Payer deducts TDS if the amounts exceed 10,000 (Section 194 A).

When is Tax deducted? : At the Time of Payment or Credit

Entry:

Bank A/c ..............................Dr       90,000

TDS Receivable A/c ............Dr       10,000

            To Interest Income A/c                     1,00,000

(Being Interest Paid after TDS)

(Alternative treatment: If Interest is Accrued with Corresponding Dr. to Fixed Deposit A/c, then Fixed deposit is credited instead of Interest income.)