The adjusting entry to record interest owed on obligations at the end of the accounting period includes a debit to:

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A company incurs interest each month on its unpaid note payable.An adjustment is needed to record the Interest Expense relating to the current accounting period and,because this interest has not yet been paid,the adjustment also must record a liability called Interest Payable.The entry includes a debit to Interest Expense and a credit to Interest Payable.

The Adjusting Entry to Record Interest Owed on Obligations at the End