Question

On June 30, 2018, the Esquire Company sold some merchandise to a customer for $38,000. In payment, Esquire agreed to accept a 8% note requiring the payment of interest and principal on March 31, 2019 The 8% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (ómit 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. 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 2018 and 2019? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the Decembe i 208 bnterest accral, and the thardh 31 201 colletion. tIf no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list Journal entry worksheet Record the sale of merchandise. Prey 50f 61, Next >