Question

What is the correct adjustment entry for accrued interest on investments of Rs 1,000?

• A. Interest receivable A/c Dr 1,000
  To Interest on investment A/c 1,000
• B. Interest on investment A/c Dr 1,000
  To Interest receivable A/c 1,000
• C. Interest on investment A/c Dr 1,000
  To Prepaid interest A/c 1,000
• D. Outstanding interest A/c Dr 1,000
  To Interest on investement A/c 1,000

Answer 1

The correct option is A

Interest receivable A/c Dr 1,000
To Interest on investment A/c 1,000

The correct entry is:

Interest receivable A/c Dr 1,000
To Interest on investment A/c 1,000