Question

During December, Far West Services makes a $3,600 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. Record sales and sales tax payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Transaction	General Journal	Debit	Credit
1	Accounts Receivables	$ 3,906.00
	Sales Revenue		$ 3,600.00
	Sales tax Payable		$     306.00
	(sales made and sales tax to collected from customer)

Note 1) Sales tax is collected from Customer and then deposited to the government.
First Sales tax is credited to a liability account and then paid in cash.

Alternate Journal entry for the above transaction

Transaction	General Journal	Debit	Credit
1	Accounts Receivables	$ 3,906.00
	Sales Revenue		$ 3,600.00
	State Sales tax Payable		$     216.00
	Local Sales tax Payable		$        90.00
	(sales made and sales tax to collected from customer)

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