The entry to journalize an adjusting entry for interest income is
A) debit Income Summary; credit Interest Income.
B) debit Interest Income; credit Income Summary.
C) debit Interest Income; credit Interest Receivable.
D) debit Interest Receivable; credit Interest Income.

Question

Quizplus · Accepted Answer

Adjusting entries for accrued interest income involve debiting (increasing) Interest Receivable to recognize the asset (the interest that is earned but not yet received) and crediting (increasing) Interest Income to recognize the revenue earned during the period, even though the cash has not yet been received.

The Entry to Journalize an Adjusting Entry for Interest Income