capitalisation of int.on loan

E S S PRABHAKAR (accounts) (71 Points)

21 August 2009  

 

DEAR SIR/S

I HAVE AN DOUBT REG.THE FOLLOWING KINDLY CLARIFY THE SAME:

IF A VEHICLE PURCHASED FOR 5 LAKHS(ASSUMED) AND GONE FOR FINANCE FOR 5 LAKHS AND 2 LAKHS INT.FOR 36 MONTHS. WHILE PASSING THE ENTRY SHALL I CAPTLAISED THE INTERST TO VEHICLE ACCOUNT ? i.e VEHICLE A/C DR 7.00LAKHS  TO FINANCE COMPANY A/C 7.00LAKHS  THEN ,AS PER THE ABOVE ENTRY IAM ELIGIBEL TO CLAIM DEPRECIATION ON 7.00LAKHS ISNT NOT?

OR SHALL I SEPARATE THE INT.PART?AND TO CLAIM FIN.CHGS. FOR 12 MONTHS .

PL.CLARIFY

THANKS & REGARDS

PRABHAKAR.