On september 15, 2021, oliver's mortuary received a $3,600, nine-month note bearing interest at an annual rate of 14% from the estate of jay hendrix for services rendered. oliver's has a december 31 year-end. what adjusting entry will the company record on december 31, 2021

The Journal entry is as follows:

On December 31, 2021

Interest Receivable A/c Dr. $147

          To Interest revenue A/c      $147

(To record the interest receivable)

Working notes:

Interest Receivable:

= Amount received × Annual rate of interest × Time period

= $3,600 × (14% ÷ 12) × 3.5

= $3,600 × 0.01167 × 3.5

= $147

cool

Explanation: