what is red ink interest
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Answer Posted / lakshman001
In an Current Account, interest is calculated on the amount of a bill from the date of transaction to the
closing date of the period concerned. In case the due date of the bill falls after the closing date of the
account, then no interest is allowed for that period. However, it is customarily followed that interest from the
date of closing to the due date is written in red ink in the appropriate side of the Account Current. This
interest is called Red-Ink Interest. This Red-Ink interest is treated as negative interest.
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dear i want basic a\C's oriented question. these are asking in mostly all mnc companies
The following transactions relating to ABC Ltd for the month of 20x1 a) Services performed in relation to income recieved in advance total $1500 b)Supplies expense includes $400 of supplies that are still on hand at 30 June c)Interest accrued on the bank loan is 750 d)At the end of june paid rent for 3 months (June, july Aug) $6000 e)Credit sales for the month of June 2009 amounted to $50000. Past expierence shows that around 1.5% of net credit sales are written off as bad debts. XYZ ltd, previously notified ABC ltd that they have gone bankrupt, will be able to pay $1000, which was recieved at the end of the month. The provision of doubtful debt has an opening balance of $800. f) The owners of ABC Ltd wish to revise the balance of the provision of doubtful debts account to $3500. g) Depreciation of one year on the delivary van is $1500. h) On 30 June 2009, ABC Ltd sold an item of equipment for $40000 cash. The cost of equipment was $50000 and had a accumulated depreciation balance of $2000 REQUIRED: Prepare the relevant adjusting journal entries for the month of June 20x2
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