Question

Overseas Oil Co. sold merchandise for $665, plus sales tax of $48, to Auto Plastics, who paid for the merchandise with a bank credit card at the time of the sale. The journal entry for Overseas Oil Co. to record this transaction is:

Answer 1

Answer:

Explanation:

Given:

Merchandise cost = $665

Sales tax = $48

The credits are indented to emphasize that they are credits, and the total debits must always equal the total credits.

For Overseas Oil Co.,

Total Debit Cash = $713

Total credit cash:

Credit Sales = $665

Sales Tax Payable = $48