Question

On January 10, Molly Amise uses her Blossom Company credit card to purchase merchandise from Blossom Company for $1,900. On February 10, Molly is billed for the amount due of $1,900. On February 12, Molly pays $1,000 on the balance due. 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 entries for recognizing accounts receivable.

Answer 1

Please see explanation below

Step-by-step explanation:

Interest revenue to be recorded on March 10 .

Interest rate = 2% per month

Unpaid balance as of February 12 = $900

Interest revenue = $900 x 2% = $18

The journal entry to be prepared on March 10 :

Date Account Titles and Explanation Debit Credit

Mar. 10 Accounts Receivable $18(Debit)

Interest Revenue $18(Credit)