The entry to journalize the reversing entry for accrued interest expense is
A) debit Income Summary; credit Interest Expense.
B) debit Interest Payable; credit Income Summary.
C) debit Interest Expense; credit Income Summary.
D) debit Interest Payable; credit Interest Expense.

Question

Quizplus · Accepted Answer

Reversing entries are made at the beginning of a new accounting period to reverse the effects of certain adjusting entries made at the end of the previous accounting period. For accrued interest expense, the adjusting entry would have been to debit Interest Expense and credit Interest Payable. Therefore, the reversing entry is to debit (decrease) Interest Payable and credit (decrease) Interest Expense, which resets the balances and prepares for the actual interest payment transaction.

The Entry to Journalize the Reversing Entry for Accrued Interest