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GIC recording interest that is rolled into the existing GIC

PotterynerdPotterynerd Member Posts: 2

We are a small non-profit co-op and have 2 GIC's as investments and when they come due the interest automatically gets rolled into them. Our problem is how do we record the interest. We've tried doing it as a journal entry and it ends up setting it as new account and the original GIC amount doesn't change?

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  • NancyCNancyC Member Posts: 148 admin

    Hey @Potterynerd, it seems what you may want to do is allocate interest earned into an interest income account. The income interest account can be created under Accounting > Chart of Accounts.

    I've seen other users account for interest earned by creating a journal transaction to allocate funds. Let's say, hypothetically, you earned $500 interest in your GIC Investments account. You will want to make one account on the journal entry your GIC Investment, and the other account should be the new income account you just created. Debit $500 for the GIC account and credit $500 for newly created interest account.

    Please keep in mind as I'm not an accountant and cannot give full on accounting advice. If you have further questions on this process, I recommend reaching out to an accountant for their advice on the best way to go about this.

  • PotterynerdPotterynerd Member Posts: 2

    Thanks for the info.
    I have tried that, our interest just gets rolled over into the GIC. When I put it into the interest account and do a Journal Entry it keeps it separate and then GIC balance is not accurate.
    I will try again, I love the rest of the program but this glitch has me stumped.
    I am not an accountant and it has been a steep learning curve, however I have an accountant that I work with and she couldn't figure it out either.

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