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