India Entry for interest collected by bank overdraft account


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Hello all, Pls I am doing BRS for the first time for the account type that is bank OveraDraft account. So question is in the bank statement in particulars column it is written "Int coll : 1-4-2014 to 30-4-2014" in the withdrawal column amt is rs. 30,000/- so what should be the entry ? Generally when bank collects interest entry is Interest a/c....Dr. To bank a/c...Cr. Now this is an OD account so pls guide me I have heard that in OD account entry will be opposite.
 
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smallbushelp

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If I understand your situation correctly, you were charged interest by the bank instead of being paid interest. In U.S.GAAP, fees charged by a bank are an expense to the entity. In this case, it might be called "interest expense" or "bank fees expense" - whatever works for you. You would then debit the proper expense account and credit cash (the bank account) for the same amount.
 

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