The entry to journalize the reversing entry for accrued interest expense is
A) debit Income Summary; credit Interest Expense.
B) debit Interest Payable; credit Income Summary.
C) debit Interest Expense; credit Income Summary.
D) debit Interest Payable; credit Interest Expense.

Question

Quizplus · Accepted Answer

Reversing entries are made at the beginning of the new accounting period to reverse the effects of certain adjusting entries made at the end of the previous period. For accrued interest expense, the initial entry would have been a debit to Interest Expense and a credit to Interest Payable. Therefore, the reversing entry is the opposite: debit Interest Payable and credit Interest Expense. This prepares the accounts for the actual payment of interest.

The Entry to Journalize the Reversing Entry for Accrued Interest