How to record Fixed Deposits?
First Step: Create Account
Go to Accounting > Chart of Accounts > New Account
Fill in all the details:
1. Enter the account name - Provide the name of new account head in name.
2. Select account group from the drop down - Select the corresponding group for new account head in Group drop down.
3. Enter the effective date - Record when fixed deposit is made.
4. Opening balance- Record amount of the deposit.
5. Click on save
Second step: Recording of Fixed Deposits
For that user have to pass journal entries. To pass journal entry follow the below mentioned steps:
Step 1: Go to Accounting > Journal Entries, click on "Add New Record".
Step 2: Fill in the details like Date, Under project, if any.
Step 3: Under From Account select Fixed Deposits account and debit it with the amount and select cash/bank account and credit it with the same amount.
Step 4: Fill the description box for eg. "Fixed deposit created" and
Step 5: Click on save and it's done.
Third Step: Pass journal entry at the maturity of Fixed deposit while recording the interest on Fixed deposit.
Firstly, create Interest from Fixed Deposits account and then user has to pass Journal Entry,
Journal Entry to be passed:
Cash/Bank Account --> debit it with the maturity amount received
Fixed Deposits --> credit it with the same amount when it is created Interest from Fixed deposit --> credit it with the balancing amount i.e Interest