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Unearned Revenues 
Unearned revenues, also referred to as deferred revenues, are non-
financial obligations that arise from the collection of assets that have 
not yet been earned. For example, if a company were to receive cash 
before their services have actually been provided, these would be a 
form of unearned revenue. Once the goods are delivered/service is 
provided, the revenue can be recognized. 

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corporatefinanceinstitute.com
50
The Corporate Finance Institute
Accounting
Example Journal Entries:
To recognize deferred revenue:
DR Cash: 1,000
CR Deferred Revenue: 1,000
When services have been provided:
DR Deferred Revenue: 1,000
CR Revenue: 1,000
Interest Payable
Interest Payable is a liability account shown on a company’s statement 
of financial position and represents the amount of interest expense that 
has been incurred to date, but has not been paid as of the company’s 
date on the balance sheet. For example, if an interest of $1,000 on a 
note payable has been incurred but is paid in the next fiscal year, for 
the current year ended December 31, the company would record the 
following journal entry:
DR Interest Expense: 1,000
CR Interest Payable: 1,000
Interest payable amounts are usually current liabilities and may also be 
referred to as accrued interest. These accounts can be seen in multiple 
scenarios, whether it be for bond instruments, lease agreements 
between two parties, or any note payable liabilities. 
Interest Payable in Bonds 
Interest payable accounts are commonly seen in bond instruments 
because a company’s year end may not coincide with the payment 
dates. For example, let’s say that XYZ Company issued 12% bonds on 
January 1, 2017 for $860,652 that have a maturity value of $800,000. 
The yield is 10%, the bond matures on January 1, 2022 and interest is 
paid on January 1st of each year. 

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