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In: Accounting

Solstice Company determines on October 1 that it cannot collect $63,000 of its accounts receivable from...

Solstice Company determines on October 1 that it cannot collect $63,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1.

Record the write off an account.

  • Record the write off an account.
Date General Journal Debit Credit
Oct 01

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

  1. Sold $32,000 of merchandise, which cost $24,600, on Mastercard credit cards. Mastercard charges a 5% fee.
  2. Sold $6,200 of merchandise, which cost $3,600, on an assortment of bank credit cards. These cards charge a 4% fee.

1. Sold $32,000 of merchandise on Mastercard credit cards. Mastercard charges a 5% fee.
Transaction General Journal Debit Credit
1-a.

Record the cost of the sale, $24,600.
Transaction General Journal Debit Credit
1-b.
  • Sold $6,200 of merchandise on an assortment of bank credit cards. These cards charge a 4% fee.
Transaction General Journal Debit Credit
2-a.

Record the cost of the sale, $3,600.

Transaction General Journal Debit Credit
2-b.

Solutions

Expert Solution

Journal Entries of Bonds in the books of Solstice Company Amount ($)
Date Particulars Working Debit Credit
1-Oct Bad Debts A/c .. Dr      63,000.00
To Accounts Receivable/ P.Moore A/c        63,000.00
Being debts not recoverable direct written off
1-Oct Bank A/c .. Dr 32000-1600      30,400.00
Credit Card Expenses A/c .. Dr 32000*5%        1,600.00
To Sales A/c        32,000.00
Being sold $32,000 of merchandise on Mastercard credit cards. Mastercard charges a 5% fee
1-Oct Cost of Goods sold A/c .. Dr      24,600.00
To Inventory A/c        24,600.00
Being record the cost of the sale of credit card,$24600
1-Oct Bank A/c .. Dr 6200-248        5,952.00
Credit Card Expenses A/c .. Dr 6200*4%            248.00
To Sales A/c          6,200.00
Being sold $6,200 of merchandise on an assortment of bank credit cards. These cards charge a 4% fee
1-Oct Cost of Goods sold A/c .. Dr        3,600.00
To Inventory A/c          3,600.00
Being record the cost of the sale of credit card, $ 3600

ekkarill92 answered 2 years ago
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