Sara's Jewelry sold 40 necklaces for $35 each to a credit customer. The invoice included a 7% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the original sale would include: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

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CThe original sale of 40 necklaces at $35 each amounts to $1,400. With a 7% sales tax, the total comes to $1,400 * 1.07 = $1,498. Therefore, the entry to record the sale would include a debit to Accounts Receivable for $1,498 to reflect the amount the customer owes (including sales tax) and a debit to Sales for $1,400 to record the revenue from the sale before tax.

Sara's Jewelry Sold 40 Necklaces for $35 Each to a Credit