Question
In: Accounting
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $46,000 and...
On June 30, 2018, the Esquire Company sold some merchandise to a
customer for $46,000 and agreed to accept as payment a
noninterest-bearing note with an 12% discount rate requiring the
payment of $46,000 on March 31, 2019. The 12% rate is appropriate
in this situation. 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), the December 31, 2018 interest accrual, and the
March 31, 2019 collection.
2. What is the effective interest rate on
the note?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
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 collection. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1Record the sale of merchandise.
2 Record the interest accrual on December 31.
3 Record the interest accrual on March 31.
4 Record the cash collection.
What is the effective interest rate on the note? (Round your intermediate calculations and the final percentage answer to 3 decimal places.)
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
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...
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $41,000 and...
On June 30, 2018, the Esquire Company sold some merchandise to a
customer for $41,000 and agreed to accept as payment a
noninterest-bearing note with an 6% discount rate requiring the
payment of $41,000 on March 31, 2019. The 6% rate is appropriate in
this situation. 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...
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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....
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing...
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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...
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