Banking
Interest Income — Non-Performing Loan (Cash Basis)
Stopping accrual of interest on a loan classified as non-performing (Stage 3).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Interest in Suspense (Contra-Asset) | Contra-Asset (+) | - | 8,333.00 |
| Interest Income (Suspended) | Revenue (-) | 8,333.00 | - |
💡 Accountant's Note
When a loan is classified as non-performing, interest accrual stops on the P&L. Any interest that had been accrued is moved to an 'Interest in Suspense' contra account. Income is only recognized when cash is actually received.
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