Pharoah Corporation loaned $660000 to another corporation on December 1, 2020 and received a 3-month, 9% interest-bearing note with a face value of $660000. What adjusting entry should Pharoah make on December 31, 2020

Interest receivable A/c Dr $4,950

To Interest revenue A/c $4,950

(Being accrued interest is recorded)

The computation of accrued interest is shown below:

= Loan amount * rate of interest * number of months : (total number of months in a year)

= $660,000 * 9% * (1 months : 12 months)

= $4,950