Question

MacKenzie Company sold $680 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 4.0% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days. The journal entry to record this sale transaction would be:_______.a. Debit Cash of $680 and credit Sales $680.b. Debit Cash of $680 and credit Accounts Receivable Regional $680.c. Debit Accounts Receivable Regional $652.8; debit Credit Card Expense $27.2 and credit Sales $680.d. Debit Cash $652.8; debit Credit Card Expense $27.2 and credit Sales $680.e. Debit Cash $652.8 and credit Sales $652.8.

Answer 1

Answer: d. Debit Cash $652.8; debit Credit Card Expense $27.2 and credit Sales $680

Explanation:

From the question we are informed that MacKenzie Company sold $680 of merchandise to a customer who used a Regional Bank credit card and that Regional Bank deducts a 4.0% service charge for sales on its credit cards.

We.are further told that MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days.

For the recording in the journal entry, it should be noted that there will be a card expense of (4% × $680) = $27.2 who will be debited, therefore cash to be debited will be: ($680 - $27.2 = $652.8) and there will be sales of $680 which will be credited.

Therefore, the answer is option d.