When a deposit interest transaction is reversed, ResCenter removes all tracking entries for the individual deposit interests. The next time the deposit interest is calculated, it will use the time period up to the date the reversed deposit interest occurred.
For example: If interest is processed for January, February, and March, and then March’s deposit interest is reversed, interest calculated in April will be assessed for only two months (January and February).
If an initial base deposit is reversed, then ResCenter will automatically reduce the deposit balance by the portion of interest earned by the deposit being reversed. This process also includes compound interest. To make this reduction, ResCenter performs the following actions:
•The appropriate amount is transferred back into the Payment account using the default “Transfer Out” deposit code and default “Transfer In” payment code.
•In the Payment account, a debit memo transaction for the same amount is issued using the reverse code of the initial Payment code.
•The Transfer In transaction is applied to the Debit Memo transaction.
If the deposit interest transaction being reversed is not the latest deposit interest for the account, ResCenter will also automatically reverse all the deposit interest transactions posted after that one.