On June 30, 2024, 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, 2025. The fair value of the merchandise exchanged is $41,860. Esquire views the financing component of this contract as significant. Required: 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, 2024 interest accrual, and the March 31, 2025 collection. What is the effective interest rate on the note? Record the sale of merchandise. Record the interest accrual on December 31. Record the interest accrual on March 31. Record the cash collection.
On June 30, 2024, 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, 2025. The fair value of the merchandise exchanged is $41,860. Esquire views the financing component of this contract as significant. Required: 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, 2024 interest accrual, and the March 31, 2025 collection. What is the effective interest rate on the note? Record the sale of merchandise. Record the interest accrual on December 31. Record the interest accrual on March 31. Record the cash collection.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On June 30, 2024, 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, 2025. The fair value of the merchandise exchanged is $41,860. Esquire views the financing component of this contract as significant.
Required:
- 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, 2024 interest accrual, and the March 31, 2025 collection. - What is the effective interest rate on the note?
Record the sale of merchandise.
Record the interest accrual on December 31.
Record the interest accrual on March 31.
Record the cash collection.
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