Interest on Investment
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lhbc-donate
- Posts: 28
- Joined: Sun Dec 28, 2008 4:34 pm
Interest on Investment
Our investment interest is automatically reinvested. In the past I have gone through contributions to Debit investment on our balance sheet and credit income on the inc/exp statement. Is this correct? ... Carey
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JohnDMeyers
- Posts: 1338
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I think you are correct.
If you have an investment asset account with $10,000 and you reinvested $400 interest, then you want to show income of $400 and an asset of $10,400, which is what you are doing.
If you were not reinvesting the income, you would need an investment asset account and a "cash asset" account
Your income would be $400
Your investment asset would be $10,000
and your "cash asset" account would be $400
If you have an investment asset account with $10,000 and you reinvested $400 interest, then you want to show income of $400 and an asset of $10,400, which is what you are doing.
If you were not reinvesting the income, you would need an investment asset account and a "cash asset" account
Your income would be $400
Your investment asset would be $10,000
and your "cash asset" account would be $400