Question

1. Brief Exercise 8-6 Consider these transactions: (Credit account titles are automatically indented when amount is...

1. Brief Exercise 8-6

Consider these transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(a) Teal Mountain Inc. accepted a Visa card in payment of a $800 lunch bill. The bank charges a 2% fee. What entry should Teal Mountain Inc. make?
(b)

Windsor, Inc. sold its accounts receivable of $60,400. What entry should Windsor, Inc. make, given a service charge of 2% on the amount of receivables sold?
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Answer #1
No. Account Titles and Explanation Debit ($) Credit ($)
a Cash                 816
Lunch revenue          800
Bank fees            16
(Lunch revenue recorded)
b Cash            59,192
Service charge expense (60,400*2%)              1,208
Accounts receivable     60,400
(Account receivable sold)
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