Ist that accrued Interest EXPENSE? Or Acrrued Interest REVENUE?
If it is an accrued expense, you will have a liability on the balance sheet called accrued interest. It should be set up as a short term liability (payable in one year, or less). and you will recognize the expense on the Income Statement. The Income Statement will be mashed into the Retained earnings, but you do not make a journal entry for Accrued interest directly to R.E.
If it is an accrued revenue, you will set up a current asset called accrued interest. You will recognize the interest revenue on the Income Statement and offset it to the accrued interest asset account. Just the opposite of the above example.
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