Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $8,500 of cash sales that are subject to an 7% sales tax what is the journal entry to record the cash sales?
A) Debit Cash $8,500, credit Sales $7.905: credit Sales Taxes Payable $595.
B) Debit Sales Taxes Payable $595; debit Cash $7.905: credit Sales $8,500.
C) Debit Cash $9,095 credit Sales $8,500; credit Sales Taxes Payable $595
D) Debit Accounts Receivable $9,095; credit Sales $8.500; credit Sales Taxes Payable $595.
E) Debit Cash $8,500, credit Sales $8.500; and record the taxes when paid.
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