Interest accrued and due

A/c entries 577 views 2 replies

Dear All

 

How Interest accrued and Due is accounted  can any one tell me  what is stated in Schedule III?

When the doubt was raised by me whenever interest on loan is paid credit is given to Interest payable and not to loan account I am of the view that only principal portion goes to reduce the loan amount

But now I want to know what Schedule III speaks on this

can any one show the Journal entries  as per Schedule III giving an imaginary illustration of loan taken and how principal and interest is accounted

Whether Interet accrued and Due is added to Loan amount?

 

 

Thanks in advance

 

Replies (2)

If the payment done on the 10th of each month relates to that particular month,  then no provision is requried for March to be done in the books as the payment for March would have been done on the 10th of the month. However if payment ofr the current month is being made in the subsequent month then post the entry as follows on 31st MAr, Interest Expense A/c   dr To- Interest payable. In the month of Apr post the below entry Interest Payable      dr Loan A/c       dr To- Bank 
 

Sir

my question is something else but you have reported the basic journal entry for the same

 


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