On October 5th XYZ company sells $560 worth of merchandise to one of its customers. The state/local sales tax rate in their area requires them to collect 4% sales tax on all products sold.
Prepare the journal entry at the time of the sale and the journal entry on November 15th to pay the state/local taxing authorities the sales tax collected during the prior month.
| Date | Description | Debit | Credit |
|---|---|---|---|
| 10/05 | |||
| 10/05 | |||
| 10/05 | |||
| 10/05 | to record the sale of merchandise and collection of sales tax | ||
| 11/15 | |||
| 11/15 | |||
| 11/15 | to record the payment of the prior month's sales tax | ||