View Full Version : Journal Entry for Interest Received
SJohann
Feb 18, 2007, 11:13 AM
I'm having problems with the Journal Entry for the following:
Thanks in advance for any assistance!
On October 1, 2005, XYZ Co. lent $48,000 to TightFit Shoes. A note was signed with principle and 10% interest to be paid on September 30, 2006.
CaptainForest
Feb 18, 2007, 03:08 PM
The JE should be done for who, XYZ Co. or TightFit Shoes?
If for XYZ,
On Oct 1/05,
Dr. Notes receivable 48,000
Cr. Cash 48,000
On Sept 30/06
Dr. Cash 4,800
Cr. Interest Revenue 4,800
48,000 x .1 = 4,800
If for TightFit Shoes,
On Oct 1/05,
Dr. Cash 48,000
Cr. Notes payable 48,000
On Sept 30/06
Dr. Interest Expense 4,800
Cr. Cash 4,800
48,000 x .1 = 4,800
SJohann
Feb 18, 2007, 09:02 PM
The JE should be done for who, XYZ Co. or TightFit Shoes?
If for XYZ,
On Oct 1/05,
Dr. Notes receivable 48,000
Cr. Cash 48,000
On Sept 30/06
Dr. Cash 4,800
Cr. Interest Revenue 4,800
48,000 x .1 = 4,800
If for TightFit Shoes,
On Oct 1/05,
Dr. Cash 48,000
Cr. Notes payable 48,000
On Sept 30/06
Dr. Interest Expense 4,800
Cr. Cash 4,800
48,000 x .1 = 4,800
CaptainForest, This request is for the XYZ Co. Thank you sooo much!
CaptainForest
Feb 18, 2007, 10:34 PM
You are welcome SJohann.
However, I misread the question, it is not just interest, put the principle to be paid back as well.
Therefore, the JE for XYZ Co. on Oct 1/05 is:
Dr. Notes receivable 48,000
Cr. Cash 48,000
And the change comes here:
On Sept 30/06
Dr. Cash 52,800 (4,800+48,000)
Cr. Interest Revenue 4,800
Cr. Notes receivable 48,000
dudadarina
Jan 7, 2012, 01:50 AM
How do I record the following entry:
Total fixed deposit (FD) interest for 2011 is 180,000
Interest will be received in 2012 is 127,000; so interest this year is 53,000.
All the interest will add principal amount.
But I have balance in FD interest receivable amounting to 51,549.33
Tq. Please help me