Accrued Interest Payable vs Interest Expense

Q: What is the difference in Accounting between Accrued Interest and Interest Expense?

A: The difference lies between what is included on the Balance Sheet and what is included on the Income Statement. These balances are not going to be the same depending on certain variables because…

Accrued Interest Payable = The amount of interest that has not yet been paid to the customer. This interest is due, that has been earned by the lender that has not been paid yet. This can span multiple reporting periods if it has not been paid, or only part of a reporting period if it was paid during the period. This is usually driven by the due date of the payment and the actual payment of the interest.
Interest Expense = The amount of interest on the income statement that is has been incurred during the period reported.

VN:F [1.9.22_1171]
Rating: 6.0/10 (1 vote cast)
Accrued Interest Payable vs Interest Expense, 6.0 out of 10 based on 1 rating

Enter you Email and Win!

Sign up for our drawing for an Apple IPhone to help you organize your business contacts, calendar events, and more, by subscribing to our periodic newsletter. Simply add your email below and you will be enrolled. We will never, ever sell or spam your email, and you can cancel at any time!

Cite this page:

Contribute meaningful comments to the Accounting community...