On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $36,000 on March 31, 2022. The fair value of the merchandise exchanged is $33.570. 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 solds, an December 31, 2021 interest accrual, and the March 31, 2022 collection, 2. What is the effective interest rate on the note?
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $36,000 on March 31, 2022. The fair value of the merchandise exchanged is $33.570. 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 solds, an December 31, 2021 interest accrual, and the March 31, 2022 collection, 2. What is the effective interest rate on the note?
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 15EA: Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise....
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On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $36,000 on March 31, 2022. The fair value of the merchandise exchanged is $33.570. 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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