Practice Problems for Exam 2 6 Help Save &Exi; 12 Exercise 7-15 Noninterest-bear
ID: 2391670 • Letter: P
Question
Practice Problems for Exam 2 6 Help Save &Exi; 12 Exercise 7-15 Noninterest-bearing note receivable [LO7-7 On June 30, 2018, the Esquire Company sold some merchandise to a customer for $47.000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate r this situation. Esquire views the financing component of this contract as significant. ints equiring the payment of $47,000 on March 31, 2019, The 8% rate is appropriate in 02:47:03 Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection. 2. What is the effective interest rate on the note? Book Complete this question by entering your answers in the tabs below. int Required 1Required 2 merchandise (omit any entry that might be required for the cost of the goods Prepare journal entries to record the sale of sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection. (If no entry is required fora transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the sale of merchandise.Explanation / Answer
Journal Entries in the books of Esquire Company
Date
Accounts Tittles and Explanations
Debit ($)
Credit ($)
June 30, 2018
Note Receivable A/c
47,000
To Sales Revenue A/c
47,000
[Entry to record the sale of merchandise]
December 31, 2018
Interest Receivable A/c
1,880
To Interest Revenue A/c
1,880
[Entry to record the interest receivable on December 31, 2018] [$47,000 x 8% x 6/12]
March 31, 2019
Cash A/c [ $47,000 + (47,000 x 8% x 9/12)]
49,820
To Interest Revenue A/c [47,000x8% x3/12]
940
To Interest Receivable A/c
2,115
To Note Receivable A/c
47,000
[Entry to record collection on mArch 31,2019]
Date
Accounts Tittles and Explanations
Debit ($)
Credit ($)
June 30, 2018
Note Receivable A/c
47,000
To Sales Revenue A/c
47,000
[Entry to record the sale of merchandise]
December 31, 2018
Interest Receivable A/c
1,880
To Interest Revenue A/c
1,880
[Entry to record the interest receivable on December 31, 2018] [$47,000 x 8% x 6/12]
March 31, 2019
Cash A/c [ $47,000 + (47,000 x 8% x 9/12)]
49,820
To Interest Revenue A/c [47,000x8% x3/12]
940
To Interest Receivable A/c
2,115
To Note Receivable A/c
47,000
[Entry to record collection on mArch 31,2019]
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