Bank A/c is to be classified as Cash and Bank balances (group) in current assets (primary group)
Processing charges are to be classified as other borrowing cost (group) in finance cost (primary group)
Loan A/c is to be classified as Bank/NBFC/RP/Other Borrowing (group) in Secured/Unsecured Borrowings (group)
Step 3: Entry for EMI
Source documents to refer
Bank Statement + Loan Repayment Schedule
Journal Entry (Payment Voucher)
____ Loan A/c Dr.
Interest on Loan A/c Dr.
____ Bank A/c Cr.
Classification of Ledgers
Loan A/c classification is as specified in Step 3
Interest on Loan A/c is to be classified as interest cost (group) in finance cost (primary group)
Bank A/c classification is as specified in Step 3
Step 5: Additional Entry for EMI (for NBFC loans only)
Source documents to refer
Income Tax Act, 1961 [TDS Rate @ 10% u/s 194A]
Journal Entry (Journal Voucher)
TDS Receivable from ____ NBFC Dr.
TDS Payable on Interest Cr.
Classification of Ledgers
TDS Receivable is to be classified as Short Term Loans and Advances (group) in Current Assets (primary group)
TDS Payable on Interest is to be classified as TDS Payable (group) in Statutory Dues (group) in Other current liabilities (group) in Current Liabilities (primary group)