Question

what is the journal entry of 'received interest 700'

Answer 1

Cash A/c Dr. 700
To Interest Received A/c 700

(Being Interest Received)

Answer 2

Cash A/c…..Dr------700

To interest A/c------------700 (Being interest received)

Explanation:

Here in this case as cash is being increased, we will debit it as it's a current asset. According to the modern accounting rule, when assets are increased, they should be debited. As the normal accounting rule, 'debit the receiver, credit the giver' as the interest is being received we credit it.

Therefore making the entry complete, Cash account debited and interest account credited. These are very simple and basic entries, if we follow the modern and the contemporary rules of accounting these entries will become easier.

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