Question

30-Sep	The following information is available:
	Sales Revenue (net credit sales)	1,200
	Accounts Receivable	800
	Allowance for Doubtful Accounts	15	(credit balance)
	Prepare the journal entry assuming that bad debts are expected to be 6% of accounts receivable.
	GENERAL JOURNAL
DATE	ACCOUNT TITLE		DEBIT	CREDIT

	Garcia Company has accounts receivable of		$        2,500
	Prepare the journal entries for the following transactions:
1-Sep	Added 1% finance charges to $600 company credit card balances for not paying within 30 days.
10-Sep	Sold $7,000 of accounts receivable to the Factors, Inc. who charge a 5% commission.
20-Sep	Made VISA credit card sales of $800. Current VISA fee is 4%.
	GENERAL JOURNAL
DATE	ACCOUNT TITLE		DEBIT	CREDIT

Answer 1

30-Sep	The following information is available:
Sales Revenue (net credit sales)	1,200
Accounts Receivable	800
Allowance for Doubtful Accounts	15	(credit balance)
Prepare the journal entry assuming that bad debts are expected to be 6% of accounts receivable.
	GENERAL JOURNAL
DATE	ACCOUNT TITLE	DEBIT	CREDIT
30-Sep	Bad debt expense (800 -15) x 6%)	47.1
	Allowance for doubtful accounts		47.1
Garcia Company has accounts receivable of		$        2,500
Prepare the journal entries for the following transactions:
1-Sep	Added 1% finance charges to $600 company credit card balances for not paying within 30 days.
10-Sep	Sold $7,000 of accounts receivable to the Factors, Inc. who charge a 5% commission.
20-Sep	Made VISA credit card sales of $800. Current VISA fee is 4%.
	GENERAL JOURNAL
DATE	ACCOUNT TITLE	DEBIT	CREDIT
1-Sep	Accounts Receivable ($600 x 1%)	6
	Interest Revenue		6
	(To recognize finance charges)
10-Sep	Cash	6650
	Service Charge Expense ($7,000 × 5%)	350
	Accounts Receivables		7000
	(To record sale of receivables)
20-Sep	Cash	768
	Service Charge Expense ($800 × 4%)	32
	Sales		800