Reminder: calculate and post interest
You should calculate the interest for a reminder in BWR and then post it to the correct accounts? Don't despair, use the interest formula and use it to calculate the amount of your dunning fees.
What you need:
- calculator
- BWR chart of accounts
Calculate interest on arrears using the interest formula
- Read the reminder problem carefully and make a note of the values for the interest rate formula. These would be the capital amount (K), on which the default interest is due, and the interest rate (p) if the payment is not made on time.
- You also need the interest duration (t) in days. These must always be determined to the day. A whole year counts with 365 days and every month counts according to the calendar, such as January with 31 days, February with 28 days and April with 30 days.
- If a period is specified, for example from October 5, 2012 to November 20, 2012, you must first make an additional calculation for the days. Calculate October with 31 days and subtract the 5 days, you have 26 days. To do this, add the remaining days in November with 20 days and you get a total of 46 days of interest.
- As soon as you have all the values, insert them into the interest formula Z = (K * p * t) / (100 * 365). For an example with a capital of 5,000 euros, an interest rate of 9% and an interest period of 46 days, your interest formula is now (5,000 * 9 * 46) / (100 * 365).
- Type the formula into your calculator and calculate the result for the interest (Z) you get a total of 56.71 euros. You must now post this value for the reminder using the BWR chart of accounts.
How do you calculate annual interest?
Interest is an important topic in mathematics lessons in the lower grades. The …
Correctly book interest on reminders
- If the task text for the reminder is that a customer is in default of payment and default interest is charged, this results in a claim against the customer. In this case, the posting record is debit receivables to credit interest income. Because the interest on arrears is seen as income for the company.
- On the other hand, do you have to calculate the default interest in the task because the company has its If payment obligations have not been met, the reminder is an open liability towards the supplier. Since the interest is considered an expense here, the posting rate is interest expenses in debit to liabilities in credit.
- Regardless of which variant you have to post with regard to the reminder, the value is in the debit or im have your interest that you calculated using the interest formula.
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