How to account for Loan extended in nbfc.
Ex: Loan of Rs. 3,00,000/- given for 12 months, EMI - 29246/-
1) Party Account Dr 3,50,952
to Bank 3,00,000
to Unmatured Interest 50,952
When ever EMI received amount will be credited to Party A/c on completion of EMI Party account will be tally.
what ever be the interest accrued will be transferred to Interest received A/c(P&L) on that particular financial year.
(OR)
2) Party Account Dr 3,00,000
to Bank 3,00,000
when ever EMI received amount will be credited to Party account. and on completion of a financial year Interest accrued will be transferred to Interest received account from party account.
if 1st option is correct is it asset value of party is overstated? if 2nd option is correct at any point of time party a/c balance would not be tally with the repayment schedule of loan?
please advice me?
CAclubindia
