Which of the following would be the adjusting entry to record accrued interest on a loan made to the business at the end of an accounting period?
A)Dr.Interest expense,Cr.Cash
B)Dr.Interest expense,Cr.Interest payable
C)Dr.Interest payable,Cr.Interest income
D)Dr.Interest payable,Cr.Cash

Question

Quizplus · Accepted Answer

Accrued interest on a loan means that the interest has been incurred but not yet paid. Therefore, an adjusting entry is needed to record the interest expense and the liability to pay it (interest payable). The entry should be Dr.Interest expense (Income Statement account) and Cr.Interest payable (Balance Sheet account).

Which of the Following Would Be the Adjusting Entry to Record