Question

1. On January 10, Molly Amise uses her Blossom Company credit card to purchase merchandise from Blossom Company for $1,900.

Answer 1

Answer:

Accounts Receivables      1,900 debit

           Sales Revenue                       1,900 credit

Cash                                   1,000 debit

    Accounts Receivables                  1,000 credit

Accounts receivables            18  debit

   Interest revenue                                18 credit

Explanation:

Blossom made a sale on account, we recognize the sales revenue and also; the account of the customer.

We later record the amount collected from Molly which, decreases her account.

Finally on March 10th we adjust Molly's account for the interest accrued for the period:

molly account balance: 1,900invoice - 1,000 payment: 900

interest on balance:

900 x 2% = 18