M.SATHISH KUMAR HAS ASKED THIS QUESTION IN EXPERTS QUERY (UNDER TITLE ACCOUNTING TREATMENT DATED 04/05/2008) - THIS IS THE QUESTION
Hello Sir
One of my client taken a loan from ICICI bank Rs 500000/- but they received only Rs.488000 and odd figures. As I inquired about the difference with my client, he said
its a loan processing fee....
tell me whether it is right or wrong... If so, how should i pass entry for the same...
Its urgent please reply asap
Thanks in advance!!!
CA SHAILESH HAS ANSWERED THE QUESTION LIKE THIS WHICH I THINK IS WRONG
It is very simple. Dr loan processing fees/bank charges and credit the amount of Rs. 12000/- to loan a/c
MY ANSWER IS WHICH I THINK IS CORRECT IS -
You cannot credit to loan A/c as that would imply that your loan is reduced by Rs.12000. This is not the case. You still have to pay back Rs. 500000 and not Rs. 480000. The 12000 Rs loan processing is extra. You have to pass a receipt entry for loan
bank A/c
to Loan A/c
and a payment entry for loan processing fee
Loan Processing fee/bank Charges A/c
To Bank A/c
YOU CANNOT SET OFF THE TWO ENTRIES. WHICH IS ABSOLUTELY WRONG.
CAclubindia
