Record the interest expense on the short-term payable. Interest expense has not been accrued on any of the notes. Record the interest expense for each note separately.

Note One: On November 16, $2,000.00 was borrowed for 90 days at 9% interest.

Note Two. On December 26, $30,000.00 was borrowed for 60 days on a discounted basis (discount rate 12.0%) and $600.00 was debited to the Discount on Notes Payable account. Record the five days of accrued interest on this note payable. The Discount on Notes Payable will be credited for this adjusting entry.