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What is entry for Interest collected by bank od account

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Mayson

Others

40 Points Joined July 2015

Hello all, Pls I am doing BRS for the first time for the account type that is bank OveraDraft account. So question is in the bank statement in particulars column it is written "Int coll : 1-4-2014 to 30-4-2014" in the withdrawal column amt is rs. 30,000/- so what should be the entry ? Generally when bank collects interest entry is Interest a/c....Dr. To bank a/c...Cr. Now this is an OD account so pls guide me I have heard that in OD account entry will be opposite.

Replies (1)

V P Narasimhan

Accounts Manager

795 Points Joined November 2008

A Company may have various a/c viz., Cash Credit, O D,Current A/c & so on. If we want to maintain Interest incurred on the paritucular a/c where we have more than one a/c we may open as follows:

O D Interest a/c

Interest - C A A/c

It will enable how much interest paid to the Bank at the end of a particular period.