the company has earned (but not recorded) $700 of interest revenue for the year ended december 31. the…

the company has earned (but not recorded) $700 of interest revenue for the year ended december 31. the interest payment will be received 10 days after the year - end on january 10. note: enter debits before credits. transaction general journal debit credit e. record entry clear view general journal

the company has earned (but not recorded) $700 of interest revenue for the year ended december 31. the interest payment will be received 10 days after the year - end on january 10. note: enter debits before credits. transaction general journal debit credit e. record entry clear view general journal

Answer

Explanation:

Step1: Identify the accounting principle

Under accrual - accounting, revenue is recognized when earned. Since the interest revenue is earned but not received, an adjusting entry is needed.

Step2: Determine the accounts affected

The interest revenue account should be credited to recognize the revenue, and a receivable account (Interest Receivable) should be debited as the company has a right to receive the interest.

Step3: Record the journal entry

Debit Interest Receivable for $700 and credit Interest Revenue for $700.

Answer:

Transaction General Journal Debit Credit
e. Interest Receivable $700
Interest Revenue $700