The journal entry for accrued interest on a note payable includes
A) crediting Interest Expense.
B) debiting Accrued Interest Receivable and crediting Interest Revenue.
C) debiting Accrued Interest Payable and crediting Interest Expense.
D) debiting Interest Expense and crediting Accrued Interest Payable.

Question

Quizplus · Accepted Answer

The journal entry for accrued interest on a note payable would involve debiting Interest Expense (reflecting the expense that has been incurred) and crediting Accrued Interest Payable (reflecting the liability that has been incurred). Therefore, the best choice is (D) - debiting Interest Expense and crediting Accrued Interest Payable.

The Journal Entry for Accrued Interest on a Note Payable