1. LESSON 21-1 Accrued Revenue –
8/7/2018
LESSON 21-1
Accrued Revenue –
Revenue earned in one fiscal period, but not received until a later fiscal period.
Interest that is not received until the maturity date of the note.
Calculate – P x IR x T = Accrued Interest Income
Recorded by an adj. entry on work sheet
Journalize in the General Journal
Post to the general ledger

2. ANALYZING AN ADJUSTMENT FOR ACCRUED INTEREST INCOME
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1. Debit Interest Receivable.
2. Credit Interest Income.
3. Record the adjusting entry.
LESSON 21-1

3. POSTING AN ADJUSTING ENTRY FOR ACCRUED INTEREST INCOME
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1. Post the debit.
2. Post the credit.
LESSON 21-1

4. REVERSING ENTRY FOR ACCRUED INTEREST INCOME
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Reversing entry – made at the beginning of a new fiscal period.
Opposite of adjusting entry.
Reduces the balance of Interest Receivable to zero.
1. Write the heading.
2. Debit Interest Income.
3. Credit Interest Receivable.
LESSON 21-1

5. COLLECTING A NOTE RECEIVABLE ISSUED IN A PREVIOUS FISCAL PERIOD
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January 30. Received cash for the maturity value of a 90-day, 6% note: principal, $2,000.00, plus interest, $30.00; total, $2, Receipt No. 9. 1 3 2
1. Credit for the principal of the note. 4
2. Credit for the total interest.
3. Debit for the maturity value.
4. Post the amounts in the General columns.
LESSON 21-1

6. TERMS REVIEW accrued revenue intellectual property
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accrued revenue
intellectual property
accrued interest income
reversing entry
CLOSING ENTRY - closing interest income for the fiscal period. Completed BEFORE reversing entry.
Debit – Interest Income (balance in the ledger after posting of adjusting entry)
Credit – Income Summary
LESSON 21-1

7. Why do we accrue revenue?
Examples:
Bank Loan
Construction Company Example
LESSON 21-1