What is the impact on the accounting equation of recording the accrual of interest expense?

Question

Quizplus · Accepted Answer

Accrued interest expense increases the liability for interest payable (which increases liabilities) and decreases retained earnings (which decreases shareholders' equity). Therefore, the accounting equation is impacted by an increase in liabilities and a decrease in shareholders' equity, resulting in a decrease in total equity.

What Is the Impact on the Accounting Equation of Recording