Question
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $68,000. In...
On June 30, 2021, the Esquire Company sold some merchandise to a
customer for $68,000. In payment, Esquire agreed to accept a 9%
note requiring the payment of interest and principal on March 31,
2022. The 9% 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?
Homework Answers
Answer #1
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