On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $47,000 on March 31, 2022. The fair value of the merchandise exchanged is $44,180. 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, 2021 interest accrual, and the March 31, 2022 collection. 2. What is the effective interest rate on the note?

2. Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2021 bank statement included the following information:

Balance, July 1, 2021	$	56,053
Deposits		179,800
Checks processed		(192,910	)
Service charges		(45	)
NSF checks		(1,350	)
Monthly payment on note, deducted directly by bank from account (includes $570 in interest)		(3,470	)
Balance, July 31, 2021	$	38,078

The companys general ledger account had a balance of $39,428 at the end of July. Deposits outstanding totaled $6,600 and all checks written by the company were processed by the bank except for those totaling $8,450. In addition, a $2,300 July deposit from a credit customer was recorded as a $230 debit to cash and credit to accounts receivable, and a check correctly recorded by the company as a $45 disbursement was incorrectly processed by the bank as a $450 disbursement. Required: 1. Prepare a bank reconciliation for the month of July. 2. Prepare the necessary journal entries at the end of July to adjust the general ledger cash account.