Cantrell Company is required by law to collect and send sales taxes to the state. If Cantrell has $11,000 of cash sales that are subject to an 7% sales tax, what is the journal entry to record the cash sales?

Multiple Choice

• Debit Cash $11,000; credit Sales $11,000; and record the taxes when paid.

• Debit Sales Taxes Payable $770; debit Cash $10,230; credit Sales $11,000.

• Debit Cash $11,770; credit Sales $11,000; credit Sales Taxes Payable $770.

• Debit Cash $11,000; credit Sales $10,230; credit Sales Taxes Payable $770.

• Debit Accounts Receivable $11,770; credit Sales $11,000; credit Sales Taxes Payable $770.