diff --git a/.coveragerc b/.coveragerc
index 4d0f78a81f5..303f9696fe3 100644
--- a/.coveragerc
+++ b/.coveragerc
@@ -130,7 +130,6 @@ omit =
     homeassistant/components/baf/sensor.py
     homeassistant/components/baf/switch.py
     homeassistant/components/baidu/tts.py
-    homeassistant/components/bang_olufsen/__init__.py
     homeassistant/components/bang_olufsen/entity.py
     homeassistant/components/bang_olufsen/media_player.py
     homeassistant/components/bang_olufsen/util.py
diff --git a/tests/components/bang_olufsen/conftest.py b/tests/components/bang_olufsen/conftest.py
index e77dc4d16a9..1fbcbe0fe69 100644
--- a/tests/components/bang_olufsen/conftest.py
+++ b/tests/components/bang_olufsen/conftest.py
@@ -1,10 +1,10 @@
 """Test fixtures for bang_olufsen."""
 
-from unittest.mock import AsyncMock, patch
+from collections.abc import Generator
+from unittest.mock import AsyncMock, Mock, patch
 
 from mozart_api.models import BeolinkPeer
 import pytest
-from typing_extensions import Generator
 
 from homeassistant.components.bang_olufsen.const import DOMAIN
 
@@ -44,10 +44,19 @@ def mock_mozart_client() -> Generator[AsyncMock]:
         ),
     ):
         client = mock_client.return_value
+
+        # REST API client methods
         client.get_beolink_self = AsyncMock()
         client.get_beolink_self.return_value = BeolinkPeer(
             friendly_name=TEST_FRIENDLY_NAME, jid=TEST_JID_1
         )
+
+        # Non-REST API client methods
+        client.check_device_connection = AsyncMock()
+        client.close_api_client = AsyncMock()
+        client.connect_notifications = AsyncMock()
+        client.disconnect_notifications = Mock()
+
         yield client
 
 
diff --git a/tests/components/bang_olufsen/test_init.py b/tests/components/bang_olufsen/test_init.py
new file mode 100644
index 00000000000..11742b846ae
--- /dev/null
+++ b/tests/components/bang_olufsen/test_init.py
@@ -0,0 +1,90 @@
+"""Test the bang_olufsen __init__."""
+
+from aiohttp.client_exceptions import ServerTimeoutError
+
+from homeassistant.components.bang_olufsen import DOMAIN
+from homeassistant.config_entries import ConfigEntryState
+from homeassistant.core import HomeAssistant
+from homeassistant.helpers.device_registry import DeviceRegistry
+
+from .const import TEST_MODEL_BALANCE, TEST_NAME, TEST_SERIAL_NUMBER
+
+
+async def test_setup_entry(
+    hass: HomeAssistant,
+    mock_config_entry,
+    mock_mozart_client,
+    device_registry: DeviceRegistry,
+) -> None:
+    """Test async_setup_entry."""
+
+    assert mock_config_entry.state == ConfigEntryState.NOT_LOADED
+
+    # Load entry
+    mock_config_entry.add_to_hass(hass)
+    await hass.config_entries.async_setup(mock_config_entry.entry_id)
+
+    assert mock_config_entry.state == ConfigEntryState.LOADED
+
+    # Check that the device has been registered properly
+    device = device_registry.async_get_device(
+        identifiers={(DOMAIN, TEST_SERIAL_NUMBER)}
+    )
+    assert device is not None
+    assert device.name == TEST_NAME
+    assert device.model == TEST_MODEL_BALANCE
+
+    # Ensure that the connection has been checked WebSocket connection has been initialized
+    assert mock_mozart_client.check_device_connection.call_count == 1
+    assert mock_mozart_client.close_api_client.call_count == 0
+    assert mock_mozart_client.connect_notifications.call_count == 1
+
+
+async def test_setup_entry_failed(
+    hass: HomeAssistant, mock_config_entry, mock_mozart_client
+) -> None:
+    """Test failed async_setup_entry."""
+
+    # Set the device connection check to fail
+    mock_mozart_client.check_device_connection.side_effect = ExceptionGroup(
+        "", (ServerTimeoutError(), TimeoutError())
+    )
+
+    assert mock_config_entry.state == ConfigEntryState.NOT_LOADED
+
+    # Load entry
+    mock_config_entry.add_to_hass(hass)
+    await hass.config_entries.async_setup(mock_config_entry.entry_id)
+
+    assert mock_config_entry.state == ConfigEntryState.SETUP_RETRY
+
+    # Ensure that the connection has been checked, API client correctly closed
+    # and WebSocket connection has not been initialized
+    assert mock_mozart_client.check_device_connection.call_count == 1
+    assert mock_mozart_client.close_api_client.call_count == 1
+    assert mock_mozart_client.connect_notifications.call_count == 0
+
+
+async def test_unload_entry(
+    hass: HomeAssistant, mock_config_entry, mock_mozart_client
+) -> None:
+    """Test unload_entry."""
+
+    # Load entry
+    assert mock_config_entry.state == ConfigEntryState.NOT_LOADED
+
+    mock_config_entry.add_to_hass(hass)
+    await hass.config_entries.async_setup(mock_config_entry.entry_id)
+
+    assert mock_config_entry.state == ConfigEntryState.LOADED
+
+    # Unload entry
+    await hass.config_entries.async_unload(mock_config_entry.entry_id)
+
+    # Ensure WebSocket notification listener and REST API client have been closed
+    assert mock_mozart_client.disconnect_notifications.call_count == 1
+    assert mock_mozart_client.close_api_client.call_count == 1
+
+    # Ensure that the entry is not loaded and has been removed from hass
+    assert mock_config_entry.entry_id not in hass.data[DOMAIN]
+    assert mock_config_entry.state == ConfigEntryState.NOT_LOADED