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Exercise 7-18 (Algo) Notes receivable [LO7-7] On June 30, 2021, the Esquire Company sold some merchandise to a customer for $34,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% 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, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022? Complete this question by entering your answers in the tabs below. Required 1 Required 2 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, 2021 interest accrual, and the March 31, 2022 collection. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit Notes receivable June 30, 2021 34,000 Sales revenue 34,000 December 31, 202 Interest receivable 1,190 Interest revenue 1,190 March 31, 2022 Cash 35,700 Interest revenue 510 Interest receivable 1,190 Notes receivable 34,000 Required 1 Required 2 If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022? (Do not round intermediate calculations) 2021 income before income taxes would be 1,190 x 510 X overstated by by overstated 2022 income before income taxes would be

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