At December 31, bright should record interest revenue of $100. Money gained by lending money or money acquired from depositing or investing can both be referred to as interest revenue.
Is interest revenue a liability or an asset?
If a company anticipates receiving the interest payment within the year, it typically records the interest receivable as a current asset on its balance sheet. Companies that collect interest from loans view this revenue as a significant source of income that belongs at the top of the income statement. It is the price of taking out a loan from a bank, financial institution, bond buyer, or another lender. In order to assist a business finance its operations, such as the acquisition of rival businesses or machinery, plant, and property, interest expense is incurred.
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