Unexpired interest showing as a positive figure - not a negative.

All my unexpired interest accounts for all of our chattel mortgages is a negative amount for all of my loans except one. The loan has had all unexpired interest credit entries applied. Why would this be?

Comments

John Gibson

Could be a few reasons - you could have an extra (auto) payment applied, could have a payment belonging to another finance arrangement applied incorrectly, could be the original interest schedule was different (changed, refinanced), sometimes the first payment has no interest calculated, and you might have factored interest into that first payment.

If none of those apply, and there are no more payments to make on the finance, then to rectify do a journal entry, (Dr or CR Loan Interest, Dr or Cr Unexpired interest) for example - or your accountant will be left to sort this out at year end

Regards

Nadine

The way our accountants have been doing them is to include the interest in the original opening balances and then gradually decrease the amount of interest payable each year but it actually appears that the opening balance wasnt right so when the unexpired interest amount has been decreased each year, now we are nearly at the point of finalising the loan, the unexpired amount has ended up greater that the opening balance, creating a positive amount. But the loan was opened in 2013 so this can't be corrected now.