An adjusting entry made to record accrued interest on a note payable due next year consists of

Question

Quizplus · Accepted Answer

The adjusting entry made to record accrued interest on a note payable due next year would involve debiting Interest Expense, as the business has consumed the benefit of borrowing the money and must recognize the associated expense. At the same time, the business would credit Interest Payable, as the obligation to pay interest has been incurred but not yet settled. Therefore, the correct option is D, Interest Expense - Debit; Interest Payable - Credit.

An Adjusting Entry Made to Record Accrued Interest on a Note