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Sole proprietor's Fixed Deposit accounting entries

08 February 2017

I want to know about the accounting entries of Sole Proprietor's Fixed Deposit that under which head in tally it will come and other entries related to it?

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2 Replies

Susmita Dutta, CA , CPA (CA ) (2141 Points)
Replied 08 February 2017

It will come under the head Investment.

Journal Entry.....

1. On deposit.

Fixed Deposit A/c Dr. Rs. 5,00,000

To Bank Rs. 5,00,000

2. On accrued interest

Fixed Deposit A/c Dr . Rs. 5,000

To Accrued interest. Rs. 5,000

3.On Maturity

Bank A/c Dr Rs. 5,05,000

To Fixed Deposit. Rs. 5,05,000

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Mohit Verma (-) (59 Points)
Replied 09 February 2017

But Mam on checking the other forums on this website I saw that F.D. A/c will come under the Deposit(Assets) head in tally. And entries related to its interest are in this way-

1. Accrued Interest A/c Dr.

To Interest A/c (being interest on F.D. is accrued)

And on maturity:-

2. Bank A/c Dr.

To F.D. A/c

To Accrued Interest A/c

(being F.D. is matured and amount received)