On June $30,2024,$ the Esquire Company sold merchandise to a customer and accepted a noninterest$-$bearing note in exchange. The note requires payment of $$28,000$ on March $31,2025.$ The fair value of the merchandise exchanged is $$26,530.$ Esquire views the financing component of this contract as significant.

Required:

Prepare journal entries to record the sale of merchandise $($omit any entry that might be required for the cost of the goods sold$),$ any December $31,2024$ interest accrual, and the March $31,2025$ collection.

What is the effective interest rate on the note? On June $30,2024,$ the Esquire Company sold merchandise to a customer and accepted a noninterest$-$bearing note in exchange. The note requires payment of $\backslash (\backslash$$ $28,000\backslash )$ on March $31,2025.$ The fair value of the merchandise exchanged is $\backslash (\backslash$$ $26,530\backslash ).$ 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$),$ any December $31,2024$ interest accrual, and the March $31,2025$ 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$),$ any December $31,2024$ interest accrual, and the March $31,2025$ collection.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermediate calculations.

Journal entry worksheet

Record the sale of merchandise.