Question

For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the required adjusting entry by completing the following sentence. The required adjusting entry would be to debit the ___________ (Unearned revenue/Accounts receivable/Cash/Interest receivable) account and __________ (debit/credit) the __________ (Cash/Accounts receivable/Interest revenue/Interest receivable) account.

Answer 1

Blank 1: Interest receivable

Blank 2: Credit

Blank 3: Interest Revenue

Step-by-step explanation:

Answer 2

Step-by-step explanation:

The adjusting journal entry is shown below:

Interest receivable A/c Dr $200

To Interest revenue A/c $200

(Being the interest earned is recorded)

Since the interest would not be received but it is earned so we debited the interest receivable account and credited the interest revenue account.

The other accounts which are given in the brackets are wrong.