Question
In: Accounting
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing...
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $28,000 on March 31, 2022. The fair value of the merchandise exchanged is $26,530. Esquire views the financing component of this contract as significant.
Required:
1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection.
2. What is the effective interest rate on the note?
Solutions
Expert Solution
| Answer | |||
|
1) |
|||
| Date | Account title | Debit | credit |
| June 30 2021 | Note receivable | $ 28,000 | |
| Discount on note receivable | $ 1,470 | ||
| sales revenue | $ 26,530 | ||
| December 31 2021 | Discount on note receivable | $ 980 | |
| Interest revenue (1470*6/9 ) | $ 980 | ||
| march 31 2022 | Discount on note receivable | $ 490 | |
| Interest revenue (1470-980) | $ 490 | ||
| March 31 2022 | cash | $ 28,000 | |
| Note receivable | $ 28,000 | ||
| 2)Discount amount = Face value of note *r *n/12 | |||
| 1470 = 28000* r *9/12 | |||
| 1470/28000 = r*9/12 | |||
| .0525*12/9 = r | |||
| r = .07 or 7% | |||
ekkarill92 answered 2 years agoRelated Solutions
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing...
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $30,000 on March 31, 2022. The fair value of the merchandise exchanged is $28,200. Esquire views the financing component of this contract as significant. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March...
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing...
On June 30, 2021, the Esquire Company sold merchandise to a
customer and accepted a noninterest-bearing note in exchange. The
note requires payment of $46,000 on March 31, 2022. The fair value
of the merchandise exchanged is $41,860. Esquire views the
financing component of this contract as significant.
Required:
1. Prepare journal entries to record the sale
of merchandise (omit any entry that might be required for the cost
of the goods sold), any December 31, 2021 interest accrual, and...
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing...
On June 30, 2021, the Esquire Company sold merchandise to a
customer and accepted a noninterest-bearing note in exchange. The
note requires payment of $32,000 on March 31, 2022. The fair value
of the merchandise exchanged is $29,600. Esquire views the
financing component of this contract as significant.
Required:
1. Prepare journal entries to record the sale
of merchandise (omit any entry that might be required for the cost
of the goods sold), any December 31, 2021 interest accrual, and...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $56,000. In...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $56,000. In payment, Esquire agreed to accept a 8% note requiring the payment of interest and principal on March 31, 2022. The 8% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. 2. If the...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection (Do not...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $32,000. In...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $32,000. In payment, Esquire agreed to accept a 5% note requiring the payment of interest and principal on March 31, 2022. The 5% rate is appropriate in this situation.
Required:
1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection....
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $40,000. In...
On June 30, 2021, the Esquire Company sold some merchandise to a
customer for $40,000. In payment, Esquire agreed to accept a 5%
note requiring the payment of interest and principal on March 31,
2022. The 5% rate is appropriate in this situation. Required: 1.
Please help me make the journal entries to record the sale of
merchandise (omit any entry that might be required for the cost of
the goods sold), the December 31, 2021 interest accrual, and the...
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $32,000. In...
On June 30, 2021, the Esquire Company sold some merchandise to a
customer for $32,000. In payment, Esquire agreed to accept a 5%
note requiring the payment of interest and principal on March 31,
2022. The 5% rate is appropriate in this situation.
Required:
1. Prepare journal entries to record the sale of merchandise
(omit any entry that might be required for the cost of the goods
sold), the December 31, 2021 interest accrual, and the March 31,
2022 collection....
***PLEASE ANSWER ALL QUESTIONS*** On June 30, 2021, the Esquire Company sold merchandise to a customer...
***PLEASE ANSWER ALL QUESTIONS***
On June 30, 2021, the Esquire Company sold merchandise to a
customer and accepted a noninterest-bearing note in exchange. The
note requires payment of $30,000 on March 31, 2022. The fair value
of the merchandise exchanged is $28,200. Esquire views the
financing component of this contract as significant.
Required:
1. Prepare journal entries to record the sale of
merchandise (omit any entry that might be required for the cost of
the goods sold), any December 31,...
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $56,000. In...
On June 30, 2018, the Esquire Company sold some merchandise to a
customer for $56,000. In payment, Esquire agreed to accept a 8%
note requiring the payment of interest and principal on March 31,
2019. The 8% rate is appropriate in this situation.
Required:
1. Prepare journal entries to record the sale of
merchandise (omit any entry that might be required for the cost of
the goods sold), the December 31, 2018 interest accrual, and the
March 31, 2019...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Question #1 C4H10O with a butanol combustion cycle (formation enthalpy-332,000 kJ / kmol) 25 per cent...
- Suppose a survey revealed that 19% of 494 respondents said they had in the past sold...
- Topic: Choose a company which are you are starting, and a main product or service that...
- 4. Why did the United States and the Soviet Union find themselves in a “Cold War”...
- The Facts: Ann and Bill decided to start a coffee shop. They agreed Bill would provide...
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- A firm's bonds have a maturity of 8 years with a $1,000 face value, have an...
ADVERTISEMENT