On June 30, 2024, 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, 2025. 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, 2024 interest accrual, and the March 31, 2025 collection. 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 2024 and 2025?
On June 30, 2024, 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, 2025. 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, 2024 interest accrual, and the March 31, 2025 collection. 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 2024 and 2025?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 30, 2024, 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, 2025. 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, 2024 interest accrual, and the March 31, 2025 collection.
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 2024 and 2025?
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, 2024 interest accrual, and the March 31, 2025 collection.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations.
View transaction list
Journal entry worksheet
2
1
Record the sale of merchandise.
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