The journal entry for accrued interest on a note payable includes:
A)debiting Interest expense and crediting Interest payable.
B)debiting Accrued interest expense and crediting Cash.
C)debiting Interest expense and crediting Cash.
D)crediting Accrued interest expense.

Question

Quizplus · Accepted Answer

Accrued interest on a note payable means that interest expense has been incurred but not yet paid. Therefore, the correct journal entry would be to debit Interest Expense to recognize the cost and credit Interest Payable to record the liability.

The Journal Entry for Accrued Interest on a Note Payable