I have two cells which can be either "Y" or "N". Both have list dropdowns
which are limited to Y or N and field cannot be left blank.

These two fields are mutually exclusive to the extent that both cannot be
"Y". They both can be "N".

If the cell "B6" is set to Y, the cell "B7" must be set to ""N". If the end
user then changes "B7" to "Y", then "B6" must be set to "N".

Below is my code in the Worksheet "Inputs".

If Target.Address = Range("B6") Then
If Range("B6").Value = "Y" Then
Range("B7").Value = "N"
MsgBox "If Interest is in Arrears, you cannot Defer Interest."
End If
End If
If Target.Address = Range("B7") Then
If Range("B7").Value = "Y" Then
Range("B6").Value = "N"
MsgBox "If Interest is being Deferred, you cannot pay interest
in arrears."
End If
End If

So far neither seems to affect the other.