On January 10, Molly Amise uses her Lawton Co. credit card to purchase merchandise from Lawton Co. for $1,700. On February 10, Molly is billed for the amount due of $1,700. On February 12, Molly pays $1,100 on the balance due. On March 10, Molly is billed for the amount due, including interest at 1% per month on the unpaid balance as of February 12. Prepare entries for recognizing accounts receivable.

Question

Jett Parsons

Business

15 January, 14:18

On January 10, Molly Amise uses her Lawton Co. credit card to purchase merchandise from Lawton Co. for $1,700. On February 10, Molly is billed for the amount due of $1,700. On February 12, Molly pays $1,100 on the balance due. On March 10, Molly is billed for the amount due, including interest at 1% per month on the unpaid balance as of February 12. Prepare entries for recognizing accounts receivable.

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Answers (1)

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Braelyn Weber · Answer 1

the journal entry are given below

Explanation:

given data

On January 10

purchase merchandise = $1,700

On February 10

amount due = $1,700

On February 12

Molly pays = $1,100

On March 10

amount due & interest = 1% per month

solution

Interest revenue to be recorded on March 10 that is calculated as

Unpaid balance as of February 12 = $1700 - $1100 = $600

and interest rate = 1% per month

so

Interest revenue = $600 * 1% = $6

so the journal entry are

date account title debit credit

January 10 account receivable $1700 sales revenue $1700

February 12 cash $1,100

sales revenue $1100

March 10 account receivable $6

interest revenue $6