Prepare journal entries to record the sale of merchandise

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1.[This is a variation of Exercise 7-14 modified to focus on a noninterest bearing note.] On June 30, 2013, 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, 2014. 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, 2013 interest accrual, and the March 31, 2014 collection.
2. What is the effective interest rate on the note?

Reference no: EM13882926

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