Return to the situation in Short Exercise 3-10 . Here you are accounting for the same transactions on the books of Community Bank, which lent the money to Cheap Travel.
1. Make Community Bank’s adjusting entry to accrue monthly interest revenue at October 31, at November 30, and at December 31. Date each entry and include its explanation.
2. Post all three entries to the Interest Receivable account. You need not take the balance of the account at the end of each month.
3. Record the receipt of three months’ interest at December 31.