Dear Experts,
I have a case in the Money market area, i'm using product type 55A (Interest rate instrument) for handling the loans for a customer.
he wants the FI entries to be as below:
When receiving the loan:
Dr. Accrual bank interest Exp. 200,000
Dr. Bank- Main Account 1,000,000
Cr. Loan Account 1,200,000
At the end of each month:
Dr. bank interest Exp. 10,000
Cr. Accrual Bank interest Exp. 10,000
At the end of contract:
Dr. Loan Account 1,000,000
Cr. Bank 1,000,000
As far as i know, this should be the entry:
When receiving the loan:
Dr. Bank- Main Account 1,000,000
Cr. Loan Account 1,000,000
At the end of each month:
Dr. bank interest Exp. 10,000
Cr. Accrual Bank interest Exp. 10,000
At the end of contract:
Dr. Accrual bank interest Exp. 200,000
Dr. Loan Account 1,000,000
Cr. Bank 1,200,000
To sum up, he wants to post the accrual for the bank interest at the beginning of the contract, is that applicable?
you assistant is really appreciated.
Regards,
Ahmed Samir