Naman Joshi
(Student)
(69 Points)
Replied 17 August 2020
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 17 August 2020
if you receive 3000₹ interest and if you received excess 3000₹ then,
Bank a/c 3,000₹ Asset
Advance a/c 3,000₹ Asset
To Interest income 6,000₹ Income statement.
however, IndAS recognition of loans given examples are not available. So write off the advance next year and enter it as:
Bank a/c 3,000₹
To Advance a/c 3,000₹
The problem is, one can recognise loan asset and reduce company bank account initially when a loan is given like below:
Loan a/c
To Bank a/c
then, can recognise the whole interest income under accruals
Interest Receivable a/c
To Interest income a/c
the problem again here with this entry is, when you actually receive interest annually, it will be recognised twice. So, the balance sheet treatment for SPPI/amortised cost method is not published in regards to Interest receivables recognition. I’ll check tomorrow.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 17 August 2020
On a second thought, this could be done in a different way because the Advance entry is inaccurate to calculate cash flow statement:
loan a/c 3,00,000₹
To bank 3,00,000₹
(Ten year loan given)
Interest receivable a/c 30,000₹
To Interest income a/c 30,000₹
(ten year interest receivable)
Bank a/c 3,000₹
To Interest receivable a/c 3,000₹
(annual interest received)
Bank a/c 30,000₹
To Loan a/c 30,000₹
(Annual principal received)
The arrangement should be like this from the beginning of loan.
Bhavesh
(Accounts)
(156 Points)
Replied 17 August 2020
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 19 August 2020
TDS is applicable if it is a security deposit like FD or post office deposits, TDS is nil if it is a person or a company. If TDS is applicable,
Bank 90₹
10% TDS 10₹
To Receivables 100₹
if TDS is not applicable,
Bank 100₹
To Receivables 100₹
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
