11 In its unadjusted trial balance at December 31 2017 Ninat

11. In its unadjusted trial balance at December 31, 2017, Ninatori Fashion Supply Corp. reported a total of $1,300,000 as Short-Term Notes Payable that included: $800,000 from a three-month promissory note dated November 1, 2017 and bearing 7.5% interest paya lewitthe entire principal balance at maturity on February 1 ? $500,000 from the 60-day note issued on December 29 and bearing 7.25% interest payable with the entire principal balance at maturity on March 1 Prepare the necessary adjusting entry at December 31, 2017 to properly recognize interest under GAAP, assuming Ninatori will not record two days of interest on the $500,000 note as it is immaterial. AJE #11 DATE ACCOUNT NAMES DEBIT CREDIT Supporting Calculation:

Solution

Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Dec-17 Interest Receivable    10,000.00    Interest Revenue    10,000.00 (To Record the interest revenue) Interest Revenue = $800,000 X 7.50% X 2/12 Interest Revenue = $10,000