E9-1 Presented below are two independent situations. (a) On January 6, Bennett Co. sells merchandise on account to Jackie, Inc. for $7,000, terms 2/10, n/30. On January 16, Jackie Inc. pays the amount due. Prepare the entries on Bennett’s books to record the sale and related collection. (b) On January 10, Erin Bybee uses her Sheridan Co. credit card to purchase merchandise from Sheridan Co. for $9,000. On February 10, Bybee is billed for the amount due of $9,000. On February 12, Bybee pays $6,000 on the balance due. On March 10, Bybee is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12. Prepare the entries on Sheridan Co.’s books related to the transactions that occurred on January 10, February 12, and March 10.
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(a) On January 6, Bennett Co. sells merchandise on account to Jackie, Inc. for $7,000, terms 2/10, n/30.
Dr AR $7,000
Cr Sales $7,000
On January 16, Jackie Inc. pays the amount due.
Dr Cash $6,860
Dr Sales discounts $140
Cr AR $7,000
(b) On January 10, Erin Bybee uses her Sheridan Co. credit card to purchase merchandise from Sheridan Co. for $9,000.
Dr AR $9,000
Cr Sales $9,000
On February 12, Bybee pays $6,000 on the balance due.
Dr Cash $6,000
Cr AR $6,000
On March 10, Bybee is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12
Dr Interest receivable $60 ($3,000 x 2%)
Cr Interest revenue $60
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