On July 5, GuntherGunther Company recorded sales of merchandise inventory on account,$65,000. The sales were subject to sales tax of 4%. On August 15, Gunther Company paid $2,350 of sales tax to the state.

Requirements

1. Journalize the transaction to record the sale on July 5. Ignore cost of goods sold.

2. Journalize the transaction to record the payment of sales tax to the state

1. Journalize the transaction to record the sale on July 5. Ignore cost of goods sold.

Account Debit Credit

Accounts Receivable $65,000

Sales Revenue $65,000

Sales Tax Payable $2,600 (65,000 x 4%)

2. Journalize the transaction to record the payment of sales tax to the state

Account Debit Credit

Cash $2,350

Sales Tax Payable $2,350

The ending balance on the sales tax payable account is $250