October 30, 2016 admin

Deferred Interest Income

Liabilities and Net Worth

NON US DEFERRED INTEREST INCOME LIABILITY ACCOUNT
2710

ACCOUNT EXPLANATION
Interest income collected in advance, earned from sales on open account or notes receivable.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Collection of a sale, through Notes Receivable including interest for the outstanding period CD
    Notes Receivable 1100
      Accounts Receivable—Vehicles   1110
      Deferred Interest Income 2710
             
  Transfer from Long Term Deferred Interest Income to Short Term CD    
    Deferred Interest Income   2710  
      Deferred Interest income (Current Portion)     2460
             
  Monthly write-off of deferred interest income CD    
    Deferred Interest Income   2460  
      Interest Income     9150
      Sales and Use Taxes     2150
COMMENTS
  • Subsidiary records should support the account balance including the source of the interest, total amount collected in advance, due date and month by month applications to income.
  • At month-end, a schedule should be prepared for management review.
  • Interest income collected in advance is subject to special rules of the Added Value Tax (IVA) payment. Special handling of tax involved on this account may require consultation of tax counsel as necessary.