the item you use on the sales receipt for this should have the interest income account selected and not the bank
then you use make deposits
or do journal entry for this
credit interest income
I know you can add bank interest through the reconcile window
No you don't add anything from the reconcile window. You add from Banking>For Review. "Reconcile" is a different task
I create a sales receipt from a dummy customer called Bank interest.
Just use a Bank Deposit transaction (which is what would be created if you click "Add" in Banking>For Review. A Sales Receipt transaction is for a sale.
During reconcile, one adds the interest earned into the appropriate place before reconcile. The system then credits the interest but then debits it. Why? The balance is always off by the interest amount. If you delete the debit, it deletes the credit too.