Exercise 8-9 Colaw Stores accepts both its own and national credit cards. During

Question

Exercise 8-9

Colaw Stores accepts both its own and national credit cards. During the year, the following selected summary transactions occurred.

Journalize the transactions for Colaw Stores. (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

Jan. 20

Jan. 15 Made Colaw credit card sales totaling $22,200. (There were no balances prior to January 15.) 20 Made Visa credit card sales (service charge fee 4%) totaling $6,300. Feb. 10 Collected $11,600 on Colaw credit card sales. 15 Added finance charges of 3.5% to Colaw credit card account balances.

Explanation / Answer

Date Account title Debit Credit Jan-15 Accounts receivable $ 22,200 Sales $ 22,200 (To record credit sales) Jan-20 Cash ($6,300*96%) $    6,048 Credit card expenses ($6,300*4%) $        252 Sales $    6,300 (To record sale through credit card) Feb-10 Cash $ 11,600 Accounts receivable $ 11,600 (To record collection from credit sales) Feb-15 Accounts receivable ($22,200-$11,600)*3.5%) $        371 Interest revenue $        371 (To record finance charge on credit sales)

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