I'm not sure that I understand thisMarch 15 Swifty sold merchandise for $1,000 in its retail outlet and the customer used his Swifty credit card.March 31 Swifty added 1.4% monthly interest to the customer’s credit card balance.To calculate we need to use formula [$1,000 X 1.4% X (1/2) month]. I would appreciate it if somebody would explain to me why we multiplied [($1,000 X 1.4%) on 1/2 months] **Swifty Company Transactions and Journal Entries****Overview:**The following transactions are examples from Swifty Company, which markets products both in large quantities to other companies and in a small retail outlet.**Transactions:**- **March 1:** Sold merchandise on account to Dodson Company for $11,000, terms 4/10, n/30.- **March 3:** Dodson Company returned merchandise worth $400 to Swifty.- **March 9:** Swifty collected the amount due from Dodson Company from the March 1 sale.- **March 15:** Swifty sold merchandise for $1,000 in its retail outlet. The customer used his Swifty credit card.- **March 31:** Swifty added 1.4% monthly interest to the customer’s credit card balance.**Journal Entries:**| Date | Account Titles and Explanation | Debit | Credit ||-----------|--------------------------------------|---------|---------|| March 1 | Accounts Receivable | 11,000 | || | Sales Revenue | | 11,000 || March 3 | Sales Returns and Allowances | 400 | || | Accounts Receivable | | 400 || March 9 | Cash | 10,176 | || | Sales Discounts | 424 | || | Accounts Receivable | | 10,600 || March 15 | Accounts Receivable | 1,000 | || | Sales Revenue | | 1,000 || March 31 | Accounts Receivable | 7 | || | Interest Revenue | | 7 |**Notes:**- Credit account titles are automatically indented when amounts are entered. Do not indent manually.- Journal entries are recorded in the order presented in the problem.- Cost of goods sold entries and explanations are ignored in this example.

Swifty charged interest for the outstanding amount due from the customer on the value of merchandise…

I'm not sure that I understand this March 15 Swifty sold merchandise for $1,000 in its retail outlet and the customer used his Swifty credit card. March 31 Swifty added 1.4% monthly interest to the customer’s credit card balance. To calculate we need to use formula [$1,000 X 1.4% X (1/2) month]. I would appreciate it if somebody would explain to me why we multiplied [($1,000 X 1.4%) on 1/2 m

I'm not sure that I understand this March 15 Swifty sold merchandise for $1,000 in its retail outlet and the customer used his Swifty credit card. March 31 Swifty added 1.4% monthly interest to the customer’s credit card balance. To calculate we need to use formula [$1,000 X 1.4% X (1/2) month]. I would appreciate it if somebody would explain to me why we multiplied [($1,000 X 1.4%) on 1/2 m

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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