05 September 2016
Hi Sir,
For previous year 2014-15 we have been created 10000 as excess amount towards accrued interest, now in current year 2015-16 we need to reverse the entry up to 10000 so please suggest how to pass the entry and its adjustments....
05 September 2016
Accrued Interest Which are shown as other current asset, you have close that account by Receipt of Interest Like, Cash/Bank Account Dr. XXX To Interest Income(C.Y) XXX To Accrued Interest (P.Y) XXX
05 September 2016
thanks sir
as if we pass the journal for accrued interest it us
accrued interest (DR)
To interest receivable (CR)
if accrued interest was received entry is
Fixed Deposit A/C (DR)
To Accrued Interest (CR)
but to reverse the excess accrued interest amount what you have shown is not appropriate
05 September 2016
See The Example My FD of Rs. 10 Lacs @ 12% P.A I made It on 1st July for 1 Year And Interest received at the time of Maturity. Now on 31st March I Pass the Entry Like This Interest Receivable (Accrued Interest) A/c Dr. 90,000 To Interest Income A/c 90,000 Now On 1st July I receive Rs. 120000 from Bank as Interest Income at that time entry is Cash/ Bank / [FD (if you want to renew)] A/c Dr. 120000 To Interest Income A/c 30000 To Interest Receivable (Accrued Interest) A/c 90000 I Hope Now your Doubt Cleared Thanks.
05 September 2016
Thanks. for the example sir.
Now let's see the example
Whatever the example you have given is same but on 31st March instead of 90000 I have made accrued interest as 150000 Now I need to reverse the excess amount on 1st July
Can you give the entry for the example...
06 September 2016
But You can not pass the entry of 150000 on 31st March Because Your Accrual as on date is 90000 only, if you pass by 120000 than you booked excess income on 31st March, You have to pass rectification entry on 31st March by Rs.30000 Interest Income A/c Dr. 30000 To Accrued Interest 30000 If Not possible than no need to pass the entry because you are already booked the full interest income in P.Y so in current year you will set the accrued interest account only by passing following entry Cash/ Bank/FD A/c Dr. 120000 To Accrued Interest 120000 Thanks.
06 September 2016
Sir
It's ok..
mistakenly I have created more amount I.e.,150000 instead of 90000 but I didn't reverse the amount on 31st March so in current year to balance the current year accrued interest amount I need to reverse the excess amount Rs.60000
please tell me the entry what I need to pass in current year for such excess
07 September 2016
Current Year You don't Need to pass the rectification entry as i replied above also please read it. But in case you pass the entry as on 31st March More amount than Interest actually received than that More amount you need to reverse by passing following entry Interest Income A/c (P.Y Excess Income Booked) Dr. To Accrued Interest A/c Thanks.
CAclubindia
