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FI Entries during Interest rate instrument posting

Dear Experts,

I have a case in the Money market area, i'm using product type 55A (Interest rate instrument) for handling the loans for a customer.

he wants the FI entries to be as below:

When receiving the loan:

Dr. Accrual bank interest Exp.           200,000

Dr. Bank- Main Account                    1,000,000

     Cr. Loan Account                               1,200,000

At the end of each month:

Dr. bank interest Exp.                        10,000

     Cr. Accrual Bank interest Exp.           10,000

At the end of contract:

Dr. Loan Account                               1,000,000

     Cr. Bank                                              1,000,000

As far as i know, this should be the entry:

When receiving the loan:

Dr. Bank- Main Account                    1,000,000

     Cr. Loan Account                               1,000,000

At the end of each month:

Dr. bank interest Exp.                        10,000

     Cr. Accrual Bank interest Exp.           10,000

At the end of contract:


Dr. Accrual bank interest Exp.           200,000

Dr. Loan Account                               1,000,000

     Cr. Bank                                              1,200,000

To sum up, he wants to post the accrual for the bank interest at the beginning of the contract, is that applicable?

you assistant is really appreciated.

Regards,

Ahmed Samir

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