Vehicle loan entry

The difference between loan amount and total of EMI is interest, which is in this case Rs.11628 (94368-82740)

Pass below entries when each installment is paid,

Vehicle / Bank loan a/c.       Dr.XXX

Interest a/c.           Dr.XXX

      To bank a/c.              Cr.XXX

Ask bank for statment of monthly installment, which will show interest and principal portion of each EMI.

The difference in bank loan amount (i.e. 82740 and 81920) can be loan processing fees charged by bank, you can ask bank for clarification of the same.

Thank you very much sir for veluable reply.

Please could you write journal entry for vehicle purchase,along with mentioned Amount,which will be help to me.

Journal entry of Purchase you have mentioned is correct,

i.e.

But shoudn't the interest also be capitalised..?

@ Keshav, no, it is revenue expenditure hence it has to be debited to profit and loss account.

Thanks
 

ok, thanx bro

@ Dev, Bro can you pls make it understand, how can it b treated as revenue expenditure, while we are bearing this cost only for our fixed asset. 

Thank you very much sir for your reply.

 

@ Keshav, Interest expense is to be accounted for in the books only when liability to pay interest occurs i.e. it becomes due.

ok bro.. thanx alot..

What will be the entry if bank disbursed loan in loan account,

The loan account must be credited then which account shuld I debit?

Entry:

------------ A/c Dr         100

 To Loan Account             100

(Which account to be debited?)

Loan for vehicle comes under which group, loan or liability group 

Loan for vehicle comes under which group, loan or liability group 

Hi Sir,

Please explain the Journal entry of EMI journal entry for principal and interest amout payable then paid from bank entry

finanly want to know the principal and interest opening closing with current year paid amount details