Prepare the entry On April 2, Nancy Hansel uses her J. C. Penney Company credit

Question

Prepare the entry

On April 2, Nancy Hansel uses her J. C. Penney Company credit card to purchase merchandise from a JC. Penney store for $4,500. On May 1, Hansel is billed for the $4,500 amount due. Hansel pays $700 on the balance due on May 3. On June 1, Hansel receives a bill for the amount due, including interest at 2% per month on the unpaid balance as of May 3. Prepare the entries on J.C. Penney Co. s books related to the transactions that occurred on April 2, May 3, and June 1. Date Account/Description Debit Credit May 3 une 1

Explanation / Answer

Apr 2 Debit 0 Credit $4500

May 3 Debit $700 Credit $3800

Amount = 3800( 1 + 2*1/100 ) = $3876

June 1 Debit 0 Credit $3876

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