i faced a problem in audit....one of our client has passed following journal .he has deposited 12lac for 3 years as fixed deposit with HDFC bank...at 31 st march he received intrest statement stating 50000 as intrest accrued on above and 5000being TDS deducted.total FD value being 12.5 lac..he passed following journal
TSD(receivable) 5000 Dr.
Intrestreceivable 45000 Dr.
To intrest accrued on FD(indirect income) 50,000
i found it right but my question is it will affect p/l a/c ...as i heard interest on fd must be capitalized in to FD balance in balance sheet.... if above entry how will it be capitalized????????