19 August 2010
Dear All, Sir here the company taken 11 Nos Loan from Banks they first calculate all thew interest and booked it as an asset (interest suspense)and after that on payment the entry is booked as like this Suppose the loan is 100000 from HDFC Bank EMI is 3778 Loan tenor is 36 Months Total interest is 36000 the 36000 is transfered to Interest suspense the entry is HDFC A/c Dr 3778 Interest (P&L)1000 To,Interest suspense 1000 TO,Bank 3778 Which is right /Not
Second I have repayment schedule if i can't paid the instalment currectly can i booked the the interest as expense ?
Interest is Charged against profit not appropriation of profit. so you can book the interest as expenses when due as per accrual basis of accounting,whether it is paid or not.
CAclubindia
