Journal Entry of fixed deposit interest in Accounting

 Welcome back to our channel today we are going to explain how to make a journal entry for fixed deposit interest and you can also learn how to make a balance sheet with FD.

Now let's start:

journal entry for fixed deposit interest

Date: 2023-10-01

Account:

• Debit: Fixed deposit account
• Credit: Cash account
• Amount: 10,000

Description: Fixed deposit made with ABC Bank

This journal entry records the deposit of $10,000 into a fixed deposit account with ABC Bank.

Here is another example of a journal entry for a fixed deposit:

Date: 2023-12-31

Account:

• Debit: Cash account
• Credit: Fixed deposit account
• Amount: 10,500

Description: The fixed deposit matured and the amount received

This journal entry records the receipt of 10,500 from ABC Bank upon the maturity of the fixed deposit. 

Here additional 500 rupees represents the interest earned on the FD.

Fixed Deposit In Balance Sheet Example

Balance Sheet

As of December 31, 2023

Assets

Current assets:

• Cash and cash equivalents: 10,500

Non-current assets:

• Fixed deposit account: 10,000

Total assets: 20,500

Liabilities and equity

Current liabilities:

• None

Non-current liabilities:

• None

Equity:

• Share capital: 0

• Retained earnings: 0

Total liabilities and equity: 20,500

• Scenario 2 : balance sheet If the fixed deposit had matured before the date

Balance Sheet

As of December 31, 2023

Assets

Current assets:

• Cash and cash equivalents: 10,500

Non-current assets:

• None

Total assets: 10,500

Liabilities and equity

Current liabilities:

• None

Non-current liabilities:

• None

Equity:

• Share capital: 0
• Retained earnings: 0

Total liabilities and equity: 10,500

Conclusion

here in this post, we add an example of a fixed deposit in balance sheet and a Journal Entry example of a fixed deposit in Accounting. if you are learning accounting then you should read this post and understand all the basics of FD In balance Sheet.