Accrued interest
This query is : Resolved
17 October 2012
Dear sir,
Suppose company take loan & they paying interest on them,
If company not paid that much interest so interest payable should add back to principal or we have to show this amount as interest payable separately because next time interest calculation should be on principal or principal + interest?
In second condition vice versa
2) if loan given by company / or financial institution etc, to any other company or firm so in this case interest receivable also add to principal or it would be shown interest receivable separately
Because one of my professor said that interest payable should add to principal but interest receivable should not add back to principal is this true if true, which accounting standard or policies said that
Expert pls reply
Suppose company take loan & they paying interest on them,
If company not paid that much interest so interest payable should add back to principal or we have to show this amount as interest payable separately because next time interest calculation should be on principal or principal + interest?
In second condition vice versa
2) if loan given by company / or financial institution etc, to any other company or firm so in this case interest receivable also add to principal or it would be shown interest receivable separately
Because one of my professor said that interest payable should add to principal but interest receivable should not add back to principal is this true if true, which accounting standard or policies said that
Expert pls reply
17 October 2012
Next time interest calculation is not the basis of entry of interest in accounts. It has to be recorded irrespective of the fact that whether next time interest would be on principal+interest or principal only.
For Interest payable:-
Interest A/c Dr........xxx
To Interest Payable..........xxx
next time interest calculation:-
Interest A/c Dr.(as per terms and comdition)
To Interest Payable..........xxxx
Similar is the case of Interest receivable.
For Interest payable:-
Interest A/c Dr........xxx
To Interest Payable..........xxx
next time interest calculation:-
Interest A/c Dr.(as per terms and comdition)
To Interest Payable..........xxxx
Similar is the case of Interest receivable.
17 October 2012
in balance sheet presentation of interest payable should shown separate or it will be add to principal for interest payable
17 October 2012
Presentation should be like this on Liabilities side:-
Loan taken from vendor name/Financial Institution
Principal...........................xxx
(+)Interest Payable.................xxx
Loan taken from vendor name/Financial Institution
Principal...........................xxx
(+)Interest Payable.................xxx
17 October 2012
as per new revised schedule vi
loan ( short term or long term ) has different head
and interest receivable & payable has different head
interest receivable (under unsecured advances )
interest payable (other current liabilities )
how will you show
principal xxx
(+) interest xxx
pls. reply
thanks
loan ( short term or long term ) has different head
and interest receivable & payable has different head
interest receivable (under unsecured advances )
interest payable (other current liabilities )
how will you show
principal xxx
(+) interest xxx
pls. reply
thanks
18 October 2012
You can show principal amount as Non-Current item and interest Receivable/payable as current item.......
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