Exercise 8-10 Presented below are two independent situations. On April 2, Jennif

Question

Exercise 8-10 Presented below are two independent situations. On April 2, Jennifer Elston uses her JCPenney Company credit card to purchase merchandise from a JCPenney store for $1,200. On May 1, Elston is billed for the $1,200 amount due. Elston pays $600 on the balance due on May 3, Elston receives a bill dated June 1 for the amount due, including interest at 3.0% 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. (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 On July 4, Swifty Restaurant accepts a Visa card for a $400 dinner bill. Visa charges a 4% service fee. Prepare the entry on Swifty books related to this transaction. (credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

SOLUTION

No. Date Account titles and Explanations Debit ($) Credit ($) A. April 2 Accounts Receivable 1,200 Sales Revenue 1,200 May 3 Cash 600   Accounts Receivable 600 June 1 Accounts Receivable (1,200-600)*3% 18 Interest Revenue 18 B. July 4 Cash 384 Service charges ($400*4%) 16 Sales Revenue 400

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