Answer:
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
