Credit sales: interest and service fees
Not what you're looking for?
Presented below are two independent situations.
(a) On April 2, Julie Keiser uses her JCPenney Company credit card to purchase merchandise from a JCPenney store for $1,800. On May 1, Keiser is billed for the $1,800 amount due. Keiser pays $700 on the balance due on May 3. On June 1, Keiser receives a bill for the amount due, including interest at 1% per month on the unpaid balance as of May 3. Prepare the entries on JCPenney Co.'s books related to the transactions that occurred on April 2, May 3, and June 1.
(b) On July 4, Newark's Restaurant accepts an American Express card for a $350 dinner bill. American Express charges a 4% service fee. On July 10, American Express pays Newark $336. Prepare the entries on Newark's books related to the transactions.
Instructions:
Journalize entries for credit card sales.
Purchase this Solution
Solution Summary
The solution reports journal entries for credit sale by JC Penneys, and service fees charged by American Express.
Solution Preview
JC Penneys entries Debit Credit
2-Apr Accounts receivable (or unbilled sales) 1,800
Credit sales 1,800
To record sale to Julie
3-May Cash 700
Accounts receivable 700
To record partial payment on ...
Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Introduction to Finance
This quiz test introductory finance topics.
Operations Management
This quiz tests a student's knowledge about Operations Management
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.