Interest recevied from Canada Revenue Agency

[jayesh]

I recevied interest in Dec 2009 from Canada Revenue agency for overpayment
of Income tax paid for year 2008 in Mar 2009. Where should I post this
interst amount?
1) Other income account on which I have to pay income tax OR
2) Penalties and interest (to government) account as a contra entry; that
expenses NOT deductible for income tax.
I appreciate your feed back.

Jayesh Shah
Apr 17, 2010



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[Laura]

Since you deducted the expenses in 2008 to receive that refund, it IS
taxable income for 2009 so Other Income is appropriate. Or at least it would
be in the USA.

 

[jayesh]

jayesh had written this in response to
http://www.rockryno.com/quickbooks/Re-Interest-recevied-from-Canada-Revenue-Agency-9522-.htm
:

I received advance payment from the customer before creating an invoice.
Using QB Pro 2009, this paymnet was credited to the name of customer under
item paymnet.
Then partial amount was adjusted against the invoice and
the remaining amount was retured to the customer by cheque.
How to link this retuned paymnet with advance paymnet that
stll showed as a credit on the name of the customer.
No doubt "open balance" for that customer is $0.00,
but "open balance report" showed both the amount i.e. credit balance as
well as retuened amount.
I appreciate your feed back.

Jayesh Shah

Randy

Thank you for your help.
Yes, it can work the way you showed but
when I received payment I have to post it as money is already in bank
account.
And when I creat an invoice I adjust the invoice against that payment as
it shows as credit for that customer.
And it also link with it.
But the problem this time is that partial payment is adjusted against the
invoice and it also linked with that invoice.
But the remaining credit and returned amount through chqeue is not linked.
Please can you light on it.
Thank you.

Jayesh Shah


-------------------------------------

Since you deducted the expenses in 2008 to receive that refund, it IS
taxable income for 2009 so Other Income is appropriate. Or at least it
would
be in the USA.

in message

Thanks Laura for your help
Jayesh Shah





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