Return to the situation in Short Exercise 3-10. Here you are accounting for the same transactions on the books of First State Bank, which lent the money to Laziza Restaurant.
1. Make First State 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 do not need to calculate the balance of the account at the end of each month.
3. Record the receipt of three months' interest at on January 2.