Interest is a legal return on investment that can be charged on loans and late payments in the business world. Simple or compound interest can be used to compute interest.
A bank OD account is a bank's current account. An over draught account occurs when a consumer draws more than his available balance. Not every current account is in overdraft. However, a draught account is a current account all over.
The company can make the journal entry by debiting the cash account and crediting the overdraft loan account when it starts using the bank overdraft (e.g. taking money from the overdraft loan).
By pressing F11 on the keyboard, you may get to the Tally Features Screen from the Tally Gateway. Enable the option to initiate interest calculation by typing 'Yes' in the company feature screen, as well as the option to keep bill-by-bill details: to the affirmative It's critical to have a plan. For a simple interest computation, set advanced parameters to No.