Which of the following occurs when a company records accrued interest expense on a note payable?
A) Interest expense is credited.
B) Note payable is credited.
C) Cash is debited.
D) Interest payable is credited.

Question

Quizplus · Accepted Answer

When a company records accrued interest expense on a note payable, the interest payable account is credited while the interest expense account is debited. This is because the company has incurred an obligation to pay interest, which is a liability, and this liability is recorded by crediting the interest payable account. At the same time, the company recognizes that it has incurred an expense in the form of interest, and this expense is recorded by debiting the interest expense account.

Which of the Following Occurs When a Company Records Accrued