On 1.4.2020, Good Health Club purchased 8% investments of ₹5,00,000. The Receipts & Payments Account for the year ended 31.03.2022 showed interest received on investments ₹32,000. This included interest of ₹2,000 relating to the year ended 31.03.2021. The amount of accrued interest to be shown in the Balance Sheet as on 31.03.2022 is:

Correct option is C

Step 1: Understand the timeline and interest
· Purchased on  1.4.2020: 8% investments of ₹5,00,000.
· Interest per year = 8% of ₹5,00,000 = ₹40,000.
· Interest is likely receivable annually (or semi-annually, but here totals suggest yearly).
Step 2: Interest for each year
· Year 1: 1.4.2020 to 31.3.2021 → ₹40,000 interest receivable.
· Year 2: 1.4.2021 to 31.3.2022 → ₹40,000 interest receivable.
Step 3: Interest received in year ended 31.3.2022
Receipts & Payments A/c for year ended 31.3.2022 shows interest received = ₹32,000. This includes ₹2,000 relating to  year ended 31.3.2021 (i.e., accrued interest from previous year).
So, out of ₹32,000:
· ₹2,000 is for 2020–21 (accrued last year)
· Remaining ₹30,000 is for 2021–22.
Step 4: Accrued interest for 2021–22
Total interest for 2021–22 = ₹40,000. Received during 2021–22 = ₹30,000. So accrued interest for 2021–22 = ₹40,000 – ₹30,000 = ₹10,000.
This ₹10,000 will appear in the Balance Sheet as on 31.3.2022 under “Accrued Interest”.