On May 10 Oman Company sold merchandise for $4,000 and accepted the customer’s First Business Bank MasterCard. At the end of the day, the First Business Bank MasterCard receipts were deposited in the company’s bank account. First Business Bank charges a 3.5% service charge for credit card sales.

Instructions Prepare the entry on Oman Company’s books to record the sale of merchandise.

Exercises 403 Compute ratios to evaluate a company's receivables balance.

(SO 7, 8)

Evaluate liquidity.

(SO 7, 8, 9)

Prepare entry for sale of accounts receivable.

(SO 9)

Identify reason for sale of receivables.

(SO 9)

=

Prepare entry for credit card sale.

(SO 9)

404 CHAPTER 8_ Reporting and Analyzing Receivables Prepare entry for credit card