An Accrued Interest is the amount of interest earned on debt but not yet collected. Interest accumulates from the date a loan is issued.
It is calculated based on the last day of the accounting period.
An Accrued Interest is reported by the borrower as an expense on the income sheet and as a liability on the balance sheet, while the lender reports an accrued interest as revenue on the income statement and a current asset on its balance sheet.
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