Exercise 8-7

Presented below are two independent situations.

(a) On March 3, Kitselman Appliances sells $624,000 of its receivables to Ervay Factors Inc. Ervay Factors assesses a finance charge of 1% of the amount of receivables sold. Prepare the entry on Kitselman Appliances books to record the sale of the receivables. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles Debit Credit

Mar. 3 ? ? ?

? ? ?

? ? ?

(b) On May 10, Fillmore Company sold merchandise for $21,400 and accepted the customers America Bank MasterCard. America Bank charges a 4% service charge for credit card sales. Prepare the entry on Fillmore Companys books to record the sale of merchandise. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Title Debit Credit

May 10 ? ? ?

? ? ?

? ? ?