E9-7 Presented below are two independent situations. On March 3, Cornwell Applia
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Question
E9-7Presented below are two independent situations.
On March 3, Cornwell Appliances sells $680,000 of its receivables to Marsh Factors Inc. Marsh Factors assesses a finance charge of 3% of the amount of receivables sold. Prepare the entry on Cornwell Appliances' books to record the sale of the receivables. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date Description/Account Debit Credit
Mar. 3
On May 10, Dale Company sold merchandise for $3,500 and accepted the customer's America Bank MasterCard. America Bank charges a 4% service charge for credit card sales. Prepare the entry on Dale Company's books to record the sale of merchandise.(For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Date Description/Account Debit Credit
May 10
Explanation / Answer
Date Description/Account Debit Credit Mar. 3 Debit Cash 659,600 Debit: Factoring fee expense 20,400 Credit: Accounts receivable 680,000 Date Description/Account Debit Credit May 10 Debit: Account receivable – MasterCard 3360 Debit: Credit Card expense 140 Credit: Sales 3500
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