Contents and search
Unpaid interest and adding interest to principal
Record interest without a bank payment and avoid duplicate interest postings.
An interest posting without payment is separate from an instalment schedule.
Step by step
- 1Choose Accrue unpaid interest, the posting date and interest amount. First link an interest balance account. This posts interest expense or income against interest payable or receivable.
- 2For the later payment specify the previously accrued part. For example: accruing €30 interest and later paying €20 leaves €10 on the interest balance account. Expense or income remains €30.
- 3Is interest added to principal under the agreement? Choose Add interest to the loan and enter the interest amount. Specify which part was previously accrued. That part moves from the interest balance account to principal; new interest is recognized as expense or income once.
- 4Check principal and unpaid interest at a date. For interest on a current account, use Record interest in Current account.
What is on the screen?
- Posting date and interest
- Previously accrued interest
- Interest balance account
What happens next?
Interest remains identifiable and is not posted twice when paid or added to principal.