The customer cannot pay the invoice by the due date, which is October 31, 2022. The arrangement was made to extend the credit, and the customer signed a promissory note promising to pay the amount owing ($ 1,XXX) plus interest (5% per annum) on January 31, 2023. The company has year-end on December 31, 2022.

Replace XXX with the last three digits of your student number.

Prepare the journal entry to record this event on October 31, 2022.

Explain the impact on the financial statements at year end if the accountant failed to record the entry.