Question

Exercise 8-9 Colaw Stores accepts both its own and national credit cards. During the year, the following selected summary transactions occurred.
Jan. 15 Made Colaw credit card sales totaling $22,200. (There were no balances prior to January 15.)

20 Made Visa credit card sales (service charge fee 4%) totaling $6,300.

Feb. 10 Collected $11,600 on Colaw credit card sales.

15 Added finance charges of 3.5% to Colaw credit card account balances.

Journalize the transactions for Colaw Stores. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit
Jan. 15Jan. 20Feb. 10Feb. 15

Jan. 20


Jan. 15Jan. 20Feb. 10Feb. 15

Jan. 15Jan. 20Feb. 10Feb. 15

Answer 1

Answer:

The Journal entries with their narration is given below:-

Explanation:

The Journal entry is shown below:-

1. Account receivables  Dr,    $22,200

        To Sales                                      $22,200

(Being sales is recorded)

2. Cash  Dr,                              $6,048

Service charge expense Dr,   $252

($6,300 × 4%)

        To Sales                                 $6,300

(Being credit card sales is recorded)

3. Cash Dr,                          $11,600

        To accounts receivable       $11,600

(Being cash is recorded)

4. Accounts receivable Dr,  $364

($22,000 - $11,600) × 3.5%

         To Interest revenue           $364

(Being finance charges is recorded)