Exercise 9-8 wiley Presented below are two independent situations. On April 2, J

Question

Exercise 9-8 wiley

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 $1,400. On May 1, Elston is billed for the $1,400 amount due. Elston pays $700 on the balance due on May 3. On June 1, Elston receives a bill 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.

2) On July 4, Spangler’s Restaurant accepts a Visa card for a $300 dinner bill. Visa charges a 4% service fee. Prepare the entry on Spangler’s books related to this transaction

Explanation / Answer

Apr-02 Accounts Receivable 1400         Sales Revenue 1400 May-03 Cash 700       Accounts Receivable 700 Jun-01 Accounts Receivable 21        Interest Revenue 21 2 Jul-04 Cash 288 Service Charge 12         Sales Revenue 300

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