cantrell company is required by law to collect and send sales taxes to the state. if cantrell has $8,500 of cash sales that are subject to an 7% sales tax, what is the journal entry to record the cash sales?

Answer

{'Cash': 8500, 'Sales Tax Payable': -595}

Identify the accounts affected by the transaction. A: Cash and Sales Tax Payable will be affected.
Record the sales revenue. A: Debit Cash for the amount of the sale, $8,500.
Record the sales tax payable. A: Credit Sales Tax Payable for the amount of the sales tax, which is $595 (7% of $8,500).