An adjusting entry made to record accrued interest on a note receivable due next year consists of a:
A)debit to Interest Expense and a credit to Interest Payable.
B)debit to Interest Receivable and a credit to Interest Revenue.
C)debit to Interest Expense and a credit to Notes Payable.
D)debit to Interest Expense and a credit to Cash.

Question

Quizplus · Accepted Answer

Accrued interest on a note receivable is recorded by debiting Interest Receivable (an asset account) and crediting Interest Revenue (an income account) to recognize the earned interest.

An Adjusting Entry Made to Record Accrued Interest on a Note