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# Esquire Company adjusting entry impact

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On June 30, 2011, the Esquire Company sold some merchandise to a customer for \$30,000. In payment, The 6% rate is appropriate in this situation.
1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of goods sold), the December 31, 2011 interest accrual, and the March 31, 2012 collection.
2. If the December 31 adjusting entry for the accrual is not prepared, by how much will income before income taxes be over- or understated in 2011 and 2012?

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The expert examines an Esquire company adjusting entry impact for merchandisers.

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Question 1
June 30, 2011
Debit - Sales revenue 30,000
Credit - Notes receivable 30,000

December 31, 200
Debit - Interest receivable 900
Credit - Interest revenue 900
30,000 x 6% x 6/12 = 900

March 31, 2011
Debit - Cash 31,350
Credit - ...

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