If a customer owes interest on a bill, Accounts Receivable is debited, and Interest Expense is credited.

Name: If a customer owes interest on a bill, Accounts Receivable is debited, and Interest Expense is credited.
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Question

Quizplus · Accepted Answer

When recording interest owed by a customer, Interest Revenue (or Interest Income) is credited, not Interest Expense. Accounts Receivable is debited to record the amount owed by the customer, including the interest.

If a Customer Owes Interest on a Bill, Accounts Receivable