Question
On June 30, 2018, the Esquire Company sold some merchandise to a customer for $47,000 and...
On June 30, 2018, the Esquire Company sold some merchandise to a
customer for $47,000 and agreed to accept as payment a
noninterest-bearing note with an 8% discount rate requiring the
payment of $47,000 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 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, 2018 interest accrual, and the
March 31, 2019 collection.
2. What is the effective interest rate on
the note?
Complete this question by entering your answers in the tabs below.
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, 2018 interest accrual, and the March 31, 2019 collection. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| Date | General Journal | Debt | Credit |
| Jun 30, 2018 | |||
| December 31, 2018 | |||
| March 31, 2019 | |||
| March 31, 2019 | |||
What is the effective interest rate on the note? (Round your intermediate calculations and the final percentage answer to 3 decimal places.)
| Effectie interest rate | % |
Homework Answers
Answer #1
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