7.12 Processing a Loan Payment when Contra Accounting is Applicable
The interest on some loans (non performing assets) may be booked to a Contra GL. You would have indicated this by checking the box Contra Accounting Applicable, and specifying the Contra GL in the field Contra GL, in the Status Maintenance screen. This would have been indicated for a particular status of the loan. When a loan transaction is processed, the system first checks the status of the loan. For any status other than NORMAL, the system first checks if Contra Accounting is applicable. For the product, you have selected the box Contra Accounting Applicable in the Status Maintenance screen.
If Contra Accounting is applicable, the system first process the principal amount payment and then the interest amount payment.