Question

On June 30, 2016, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of $30,000 on March 31, 2017. The 8% 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, 2016 Interest accrual, and the March 31, 2017 collection. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 Record the sale of merchandise < Prev 5 of 8 Next > MacBook Pro

Answer 1

Answer:

Date	Particulars	Debit ($)	Credit ($)
June 30 2016	Notes receivable	30,000
	Discount on notes receivable ($30000 x 8% x 9/12)		1,800
	Sales revenue (300000-1800)		28,200
	(To record receipt of notes receivable)
Dec 31 2016	Discount on notes receivable	1,200
	Interest revenue (30000 x 8% x 6/12)		1,200
	(To record Interest revenue accrued)
Mar 31 2017	Discount on notes receivable	600
	Interest revenue (30000 x 8% x 3/12)		600
	(To record Interest revenue accrued)
Mar 31 2017	Cash	30,000
	Notes receivable		30,000
	(To record proceeds of notes receivable realized)