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c Kamala raj

c Kamala raj (Student CA CPT )     09 September 2015

Journal entry for interest on FD

hello the file that you attached is not clear what are you trying to explian 



 29 Replies

Anshul Shukla

Anshul Shukla (Article assistant)     16 July 2011

the correct entry is

Interest Receivable A/c Dr.        45000

Advance income Tax (T.D.S) A/c Dr. 5000

  To Interest                                                     50000


And Rs 50000 will be trated as the income of current yr as per AS 9 and interest  receivable will be added in the value of FDR in the balance sheet.


(Guest)

ya i think u r right ...i was confused coz i thought 50000 will be added to FD a/c...but actually 45000 only.... coz 5000 is already paid in form of TDS..

m U d I t

m U d I t (student)     17 July 2011

hi ,

i think if ur interest is accrued then u must pass this entry...

 

FD A/c                                Dr.        45000

TDS RECOVERABLE A/c        Dr.          5000

             To INTEREST A/C                                50000

reason being that if interest is accrued then you will not receive such amount until FD is matured (unless it is flexi a/c FD).therefore u must debit FD a/c instead of interest recoverable a/c.

also as instead of advance tax u should credit TDS RECOVERABLE a/c because there is difference between the two.

1 Like
CA Mohit kumar jain

CA Mohit kumar jain (Searching Source of Money)     17 July 2011

yes u r correct

it should be on accrual basis 

CA ADITYA SHARMA

CA ADITYA SHARMA (CA IN PRACTICE )     17 July 2011

the entry is correct. the reason of rs. 45000 to be t/f to fdr ac. is 50000 is accrued and out of this 50000 rs. 5000 is deducted by bank as tds

Anshul Shukla

Anshul Shukla (Article assistant)     18 July 2011

Its is interest accrued but not received account instead of FDr A/c

Aravind..

Aravind.. (CA)     18 July 2011

Ya, the entry is correct. When the entries are transferred interest accrued on fd will become interest income and will be in credit side of P&L. Interest receivable gets added up with the FD. TDS goes under the head advances in balance sheet.

Mayank Ahuja

Mayank Ahuja ("Learner")     18 July 2011

Yaa Mudit is right........

Lakshy

Lakshy (Semi-Qualified C.A. PGDFM BCom.)     18 July 2011

For more ............. please see attached file


Attached File : 408827 772147 book11.xls downloaded: 5773 times
1 Like
CA RAHUL AGARWAL

CA RAHUL AGARWAL (CA, B.com)     18 July 2011

The correct entry will be as follows-

 

ACCRUED INTEREST ON FDR A/C       Dr.           45000

TDS RECEIVABLE A/C                               Dr.           5000

          TO INTEREST ON FDR A/C                                            50,000

 

FDR AMOUNT REMAINS FIXED TILL MATURITY SO CANNOT DR. FD A/C TILL MATURITY.

 

ON MATURITY OF FDR FOLLOWING ENTRY WILL BE PASSED-

 

BANK A/C     Dr.               13,00,000

   TO FDR A/C                                                12,50000

   TO ACCRUED INTEREST ON FDR A/C        50,000

 

THIS IS THE TOTALLY CORRECT WAY FOR FDR OR NSC OR PPF


 

     

 

 

U S Sharma

U S Sharma (glidor@gmail.com)     18 July 2011

the interest on FD gets capitalized at end of every year wtih original after TDS, and then the depositor gets interest on gross amount ( FD principal+ interest credited after TDS), hence its always preferred to increase the FD value by interest amount, in place of creating "interest receivable" 

CA RAHUL AGARWAL

CA RAHUL AGARWAL (CA, B.com)     18 July 2011

AS INTEREST ON FDR IS RECEIVED ONLY AFTER MATURITY OF FDR SO WE HAVE TO SHOW INTEREST ON ACCRUAL BASIS SO U CANNOT JUST ADD THE INTEREST AMOUNT IN FDR.

Kanhaiya

Kanhaiya (Nangia & Co.)     18 July 2011

Originally posted by : rahul

The correct entry will be as follows-

 

ACCRUED INTEREST ON FDR A/C       Dr.           45000

TDS RECEIVABLE A/C                               Dr.           5000

          TO INTEREST ON FDR A/C                                            50,000

 

FDR AMOUNT REMAINS FIXED TILL MATURITY SO CANNOT DR. FD A/C TILL MATURITY.

 

ON MATURITY OF FDR FOLLOWING ENTRY WILL BE PASSED-

 

BANK A/C     Dr.               13,00,000

   TO FDR A/C                                                12,50000

   TO ACCRUED INTEREST ON FDR A/C        50,000

 

THIS IS THE TOTALLY CORRECT WAY FOR FDR OR NSC OR PPF




 

     

 

 

Yes sir is right because we cannot DR. FDR A/c 

we have to DR. interest accured a/c

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