The journal entry to record the year end accrual of interest expense on a noninterest-bearing note could include all of the following except:
A)credit to Cash
B)debit to Interest Expense
C)credit to Interest Payable
D)credit to Discount on Notes Payable

Question

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The journal entry to record the year end accrual of interest expense on a noninterest-bearing note would involve a debit to Interest Expense, a credit to Interest Payable, and potentially a credit to Discount on Notes Payable if the note was issued at a discount. However, there would not be a credit to Cash since no cash is being paid or received for the interest expense at this time.

The Journal Entry to Record the Year End Accrual of Interest