Question

Shown below are several accounts from a company's ledger with each account preceded by an identification number, and a transaction completed by this company. Indicate the number corresponding to the account debited and the number corresponding to the account credited when journalizing this transaction.

1. Accounts payable
2. Accounts receivable
3. Allowance for doubtful accounts
4. Bad debt expense
5. Cash
6. Factoring Fee Expense
7. Interest earned
8. Interest expense
9. Interest receivable
10. Notes payable
11. Notes receivable
12. Sales

Transaction - Accrued interest on a notes receivable at the end of the year. The number corresponding to the account debited is _______________ and the number corresponding to the account credited is _______________.

Answer 1

The number corresponding to the account debited for accrued interest on a notes receivable is 9 (Interest Receivable), and the number for the account credited is 7 (Interest Earned).

Step-by-step explanation:

When journalizing the transaction of accrued interest on a notes receivable at the end of the year, we need to identify which accounts are affected. In this case, the interest that has been earned but not yet received would increase Interest Receivable (an asset), and the income statement would report the earned revenue under Interest Earned.

Therefore, the Interest Receivable account, which is an asset, gets debited, reflecting an increase in assets. The Interest Earned account gets credited, reflecting an increase in revenue. According to the given list, the number corresponding to the account debited is 9 (Interest Receivable) and the number corresponding to the account credited is 7 (Interest Earned).