When interest is received for held-to-maturity securities, which of the following is the appropriate journal entry?

When a company receives interest for held-to-maturity securities, the appropriate journal entry recognizes the receipt of cash and the corresponding revenue generated from that interest. In this context, the entry made involves debiting the cash account to reflect the increase in cash on hand and crediting the interest revenue account to acknowledge that the company has earned income from its investment in debt securities.

This process correctly reflects the economic reality of receiving interest payments, as cash inflows from such securities are recognized as revenue in the period they are received. By debiting cash, the company ensures its balance sheet accurately represents the increase in liquid assets, while the credit to interest revenue shows the income produced from the investment, contributing to the earnings reported in the income statement.

The other choices inaccurately depict the accounting for interest income. They do not align with the normal recognition of revenue and cash transactions in financial accounting for held-to-maturity securities.