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Interest on Investment
Posted: Fri Jan 23, 2009 2:26 pm
by lhbc-donate
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
Posted: Fri Jan 23, 2009 5:19 pm
by JohnDMeyers
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