Which account is credited when interest revenue is recognized for held-to-maturity investments?

When interest revenue is recognized for held-to-maturity investments, the Interest Revenue account is credited to reflect the income earned from such investments. This action increases the revenue recognized in the income statement, which plays a crucial role in showing the profitability of the business.

The recognition of interest revenue occurs when it is earned, regardless of when cash is received. Crediting the Interest Revenue account establishes that the company has earned income from its investments, aligning with the accrual basis of accounting, which emphasizes recognizing income in the period it is earned rather than when cash is exchanged.

In this context, the other accounts listed either do not directly apply to the recognition of interest revenue or do not accurately reflect the income earned. For instance, Debt Investments pertains to the value of the investments themselves and is not impacted at the point of revenue recognition. Cash may eventually be affected when actual payments are received, but it does not play a role in the immediate recognition of interest revenue. Equity reflects ownership interest and profitability but is not the account credited during the recognition process. Thus, crediting Interest Revenue accurately captures the essence of recognizing income from held-to-maturity investments.