Question

Interest earned on a note receivable at December 31 equals $225. What adjusting entry is required to accrue this interest?

Answer 1

Interest receivable A/c Dr $225

To Interest revenue A/c $225

(Being the accrued interest is recorded)

Step-by-step explanation:

The journal entry to record accrued interest is shown below:

On December 31

Interest receivable A/c Dr $225

To Interest revenue A/c $225

(Being the accrued interest is recorded)

For recording this transaction we debited the interest receivable as it reflect in current asset and credited the interest revenue for $225 as it depict income