Question: Exercise 8-7 Presented below are two independent situations. (a) On March 3, Kitselman Appliances sells $667,200 of its receivables to Ervay Factors Inc. Ervay Factors

Exercise 8-7

Presented below are two independent situations.

(a)

On March 3, Kitselman Appliances sells $667,200 of its receivables to Ervay Factors Inc. Ervay Factors assesses a finance charge of 3% of the amount of receivables sold. Prepare the entry on Kitselman Appliances books to record the sale of the receivables.

(b)

On May 10, Fillmore Company sold merchandise for $13,000 and accepted the customers America Bank MasterCard. America Bank charges a 2% service charge for credit card sales. Prepare the entry on Fillmore Companys books to record the sale of merchandise.

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