A certificate of deposit is a form issued by the bank on which it certifies that it has received from the depositor mentioned a certain sum, which is payable on demand with interest at a certain rate. The certificate is given to the depositor, and the stub retained by the bank shows substantially the same information. Both certificate and stub bear a number. The entries upon issuance of such a certificate are:
Credit: Demand Certificates of Deposit (40)
An auxiliary account is usually kept by the general ledger clerk of demand certificates of deposit issued showing under debit, credit, and balance columns the issues and payments of these certificates. A descriptive column in such a record gives the name of the customer who holds the certificate. This auxiliary account should, of course, prove at all times with the general ledger account. Interest credits, of course, increase the balance of auxiliary and control accounts.