A party owes some amount to the bank, under headings of term loan, working capital loan, and OD in the current account and overdue interest payments on all above account. Party deposit some amount in the Bank. How it should be appropriated by the Bank. The question is whether the interest and overdue in interest payments and outstanding in the account towards temporary overdraft should be adjusted first and balance remaining after adjustment should be appropriated towards other heads or not.
The question in particular is whether interest should be adjusted first or the principal should be adjusted first.
