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Investment Interest Accrual

This template may be used to calculate interest income and accrued interest on various types of interest-bearing investments (such as certificates of deposit or notes receivable). Using information from the calculations, the template summarizes the balance sheet and income statement information related to the investments. The template may be used for investments with up to 360 compounding periods.

Entering Data

All of the information needed to produce the interest calculations and related financial statement information is entered on the Input worksheet. Enter the following information about each interest-bearing investment:
  • Investment description
  • Principal amount
  • Purchase date
  • Maturity date
  • Annual interest rate
  • Accrued interest at the beginning of the period
  • Interest received during the period
  • Frequency of interest compounding
The amount entered for accrued interest at the beginning of the period should be the amount accrued for financial reporting purposes. The amount entered for interest received during the period should be the actual cash received. If interest is rolled into the investment balance rather than paid, enter zero for the interest received amount.
The template calculates the amount of interest earned during the period even if no amounts are entered for accrued interest at the beginning of the period or interest received during the period. However, if beginning accrued interest and interest received are not entered, the amount calculated for accrued interest at the end of the period will be the same as the interest earned amount.
Indicate the frequency of interest compounding by clicking on the arrow in the drop-down list box for each investment entered and selecting the compounding frequency from the list. If interest is not compounded, select "None". If interest is compounded, select either Monthly, Quarterly, Semiannually, or Annually. If interest is compounded daily or weekly, selecting Monthly generally will not materially affect the interest calculations.
The Input worksheet allows up to 15 investments to be entered at one time. If necessary, use the template multiple times to enter additional investments. For example, to calculate interest on 20 interest-bearing investments, enter the first 15 investments in the Input worksheet and print the related interest calculations and financial statement information. Clear the Input worksheet; enter the remaining five investments; and print the related calculations and financial statement information. Add the totals from the two sets of calculations and financial statement information.

About the Calculations

The interest calculations assume that all investments purchased on the 28th, 29th, 30th, or 31st day of the month compound interest on the last day of the applicable compounding period. For example, if a certificate of deposit is purchased on April 30 and compounds interest quarterly, the calculations assume that interest is compounded on July 31, October 31, January 31, and April 30.