1. On January 10, Molly Amise uses her Blossom Company credit card to purchase merchandise from Blossom Company for $1,900.

2. On February 10, Molly is billed for the amount due of $1,900. On February 12, Molly pays $1,000 on the balance due.

3. On March 10, Molly is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12.

Prepare the entries on Blossom Company's books related to the transactions that occurred on January 10, February 12, and March 10. (Omit cost of goods sold entries.) (Round answers to 0 decimal places, e. g. 825. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Question

Business

Dario Roth

27 June, 10:24

1. On January 10, Molly Amise uses her Blossom Company credit card to purchase merchandise from Blossom Company for $1,900.

2. On February 10, Molly is billed for the amount due of $1,900. On February 12, Molly pays $1,000 on the balance due.

3. On March 10, Molly is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12.

Prepare the entries on Blossom Company's books related to the transactions that occurred on January 10, February 12, and March 10. (Omit cost of goods sold entries.) (Round answers to 0 decimal places, e. g. 825. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

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Answers (1)

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Kenley Morrow · Answer 1

Accounts Receivables 1,900 debit

Sales Revenue 1,900 credit

Cash 1,000 debit

Accounts Receivables 1,000 credit

Accounts receivables 18 debit

Interest revenue 18 credit

Explanation:

Blossom made a sale on account, we recognize the sales revenue and also; the account of the customer.

We later record the amount collected from Molly which, decreases her account.

Finally on March 10th we adjust Molly's account for the interest accrued for the period:

molly account balance: 1,900invoice - 1,000 payment: 900

interest on balance:

900 x 2% = 18