
Noninterest-bearing note receivable
• LO7–7
[This is a variation of E 7–14 modified to focus on a noninterest-bearing note.]
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of $30,000 on March 31, 2019. The 8% rate is appropriate in this situation. Esquire views the financing component of this contract as significant.
Required:
1. Prepare
2. What is the effective interest rate on the note?

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Chapter 7 Solutions
Intermediate Accounting
- Please provide the solution to this general accounting question using proper accounting principles.arrow_forwardPlease provide correct solution and accounting questionarrow_forwardFinancial Accounting: What treatment applies to stock dividend declarations between balance sheet and issue dates? (1) Split between both dates (2) Adjust for market value changes (3) Record at declaration date value (4) Use issue date fair valuearrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
