Accrued Interest Revenue Journal Entry

Interest is earned through the passage of time.

Accrued interest revenue journal entry. In the case above the 9 000 principal plus a 900 interest will be collected by the company after 1 year. At the end of december no entry was entered in the journal to take up the interest income. As entry is passed for every transaction in the business accrued revenue also has its journal entry in the books of accounts. It is treated as an asset for the business.

As the income has been earned but not received it needs to be accrued for in the month end accounts. In this article we will try and understand the concept of accrued revenue and also the journal entries and the accounting transactions which are related to it. Journal entry for accrued income. The company s journal entry credits bonds payable for the par value credits interest payable for the accrued interest and offsets those by debiting cash for the sum of par plus accrued interest.

The double entry bookkeeping journal entry to show the accrued interest income is as follows. It is income earned during a particular accounting period but not received until the end of that period. The 900 interest pertains to 1 year. It can be better understood with the help of an example.

Journal entry for accrued income recognizes the accounting rule of debit the increase in assets modern rules of accounting.