Question

Z-Mart uses the perpetual inventory system and allows customers to use the Z-Mart store credit card in charging purchases. Z-Mart assesses a per-month interest fee for any unpaid balance on its store credit card at each month-end. Apr. 30 Z-Mart sold merchandise for $1,000 (that had cost $650) and accepted the customer’s Z-Mart store credit card. May 31 Z-Mart recorded $4 of interest earned from its store credit card as of this month-end. Prepare journal entries to record the above selected credit card transactions of Z-Mart.

Answer 1

Answer:

Following are the journal entries

Explanation:

Z-mart uses perpetual inventory system. To enter the selected credit card transactions, the journal entries are;

No Date General Journal       Debit                    Credit

1 Apr 30 Accounts receivable 1000  

                  Sales                                        1000

   

2 Apr 30     Cost of goods sold    650  

              Merchandise inventory                 650

   

3 May 31       Accounts receivable 4  

                Interest revenue                           4