Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?
Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 7-18 (Algo) Notes receivable [LO7-7]
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.)
2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or
understated in 2021 and 2022?
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, 2021 interest accrual, and the March 31, 2022 collection. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
< 1 23
Record the sale of merchandise.
Note: Enter debits before credits.
Date
June 30, 2021
Record entry
General Journal
Clear entry
< Required 1
Debit
Credit
View general journal
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05848523-8d3f-47c3-aa28-13696e328ead%2F8557bfd0-c80a-4b71-a0d0-7441cd4dfce1%2Fhnzobn_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 7-18 (Algo) Notes receivable [LO7-7]
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.)
2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or
understated in 2021 and 2022?
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, 2021 interest accrual, and the March 31, 2022 collection. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
< 1 23
Record the sale of merchandise.
Note: Enter debits before credits.
Date
June 30, 2021
Record entry
General Journal
Clear entry
< Required 1
Debit
Credit
View general journal
Required 2 >
![Exercise 7-18 (Algo) Notes receivable [LO7-7]
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.)
2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or
understated in 2021 and 2022?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be
over-or understated in 2021 and 2022? (Do not round intermediate calculations)
2021 income before income taxes would be
2022 income before income taxes would be
< Required 1
by
by
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05848523-8d3f-47c3-aa28-13696e328ead%2F8557bfd0-c80a-4b71-a0d0-7441cd4dfce1%2Fjxozl9k_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 7-18 (Algo) Notes receivable [LO7-7]
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $66,000. 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. (Do not round Intermediate calculations.)
2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or
understated in 2021 and 2022?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be
over-or understated in 2021 and 2022? (Do not round intermediate calculations)
2021 income before income taxes would be
2022 income before income taxes would be
< Required 1
by
by
Required 2 >
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