Definition of Accrued interest:
Interest earned but not received (realized). For example, bonds usually pay interest every six months, therefore interest accrues between one interest payment and the next. The buyer of a bond pays its market value plus the interest earned up to the settlement date.
The term accrued interest can also refer to the amount of bond interest that has accumulated since the last time a bond interest payment was made.
In accounting, accrued interest refers to the amount of interest that has been incurred, as of a specific date, on a loan or other financial obligation but has not yet been paid out. Accrued interest can either be in the form of accrued interest revenue, for the lender, or accrued interest expense, for the borrower.
How to use Accrued interest in a sentence?
- There was a lot of accrued interest that stacked up on the item and that gave me nightmares because I could not stand interest.
- The amount of accrued interest to be recorded is the accumulated interest that has yet to be paid as of the end date of an accounting period.
- Accrued interest is a feature of accrual accounting, and it follows the guidelines of the revenue recognition and matching principles of accounting.
- Its not the principal amount of the student loan that causes the most trouble, its the accrued interest that piles up while you are getting your career off the ground.
- Sometimes you may get some accrued interest and can budget that money into what you use for a new project.
- Accrued interest is booked at the end of an accounting period as an adjusting journal entry, which reverses the first day of the following period.
Meaning of Accrued interest & Accrued interest Definition