Hi gurus,
My client want to give customers payment holidays, say for the first 3 months of new loans, but want to accrue the interest due during the holiday periond and add this back to the loan on monthly basis. We posting the accrued interest to income(credit) and loan balance (debit).
For example, on a loan of £100,000 @6.00% P.A, starting 01.05.2010. No payment will be taken from customers until 30.08.2010, but the 3 months interest should be added to the loan capital, so that in this example, the loan balance should be (asumming interest of £500 per month accrued during the holiday for simplicity) £100,500 by 30.05.2010, £101,000 by 30.06.2010, and £101,500 by 31.07.2010.
The problem I have is that the flow type I created is posting to income and loan GL account, but in the loan statement and balances, the remaining capitial remains £100,000 throught the moratorium period. How do I get the moratorium interests increase the remaining capital?
Thanks
Fisayo.