Ask Question
22 August, 05:24

On June 30, 2021, 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, 2022. 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, 2021 interest accrual, and the March 31, 2019 collection.

+3
Answers (1)
  1. 22 August, 09:17
    0
    1. Journal entries to record the sale of merchandise:

    Debit Accounts Receivable $30,000

    Credit Sales revenue $30,000

    Journal entries to record the interest accrual at December 31, 2021:

    Debit Interest receivable $900

    Credit Interest revenue $900

    At March 31, 2022, journal entries to record the collection:

    Debit Cash $31,350

    Credit Accounts Receivable $30,000

    Credit Interest receivable $900

    Credit Interest revenue $450

    Explanation:

    1. Journal entries to record the sale of merchandise:

    Debit Accounts Receivable $30,000

    Credit Sales revenue $30,000

    Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022.

    The amount of the interest per year = 6% x $30,000 = $1,800

    The amount of the interest per month = $1,800/12 = $150

    At December 31, 2021, the interest accrual = $150 x 6 = $900

    Journal entries to record the interest accrual:

    Debit Interest receivable $900

    Credit Interest revenue $900

    At March 31, 2022, journal entries to record the collection:

    Debit Cash $31,350

    Credit Accounts Receivable $30,000

    Credit Interest receivable $900

    Credit Interest revenue $450
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers