Is accounts receivable interest considered income or an asset?
Kind of similar to the other question you asked. But extra fee or interest charged will increase your “misc income”, or some company just put it in sales simply. When you receive payment for an invoice, you have to apply the check dollar amount to the invoice, and you can not apply more than the original invoice amount. To apply the EXTRA cash you receive, you should make a new invoice or debit memo, which will increase your sales or misc income account, and increase AR. Then you apply the extra money to the new invoice or debit memo. Only this way you will be able to apply the entire payment received. Like I said, if you don’t have a misc income account, you can use the sales account to capture the extra fees or interests.
