Tenax Therapeutics' (TENX) CEO John Kelley on Q3 2015 Results-Earnings Call Transcript.
Debit the cost of the asset and credit the loan account with the capitalized interest. In the example, debit the asset cost and credit the loan account with $50,000. The asset cost available for depreciation at the end of Year One is therefore $1,050,000. Debit the interest expense account and credit the loan account with any interest paid in excess of the interest capitalized. For example, if the total interest paid in the first year was $75,000, debit the interest expense account and credit the loan account with $75,000 minus $50,000, or $25,000.
So if this Fund is part of profit , profit is to be debited to double the amount of depreciation, once... show more while depreciate assets, profit a/c is debited, and simultaneously asset is credited , so double entry effect is raised. But in case of creating Depreciation Fund , profit is debited, such Fund is credited.