Question

Woodstock Co. had $500 of credit cards sales. The net cash receipts were deposited immediately into Woodstock's bank account less a 2% fee. The entry to record this sales transaction would include a credit to:

Answer 1

Answer:

Sales revenue for $500

Explanation:

The journal entry is shown below:

Account receivable Dr $490

Credit card expense Dr $10

                     To Sales revenue $500

(Being the sale transaction is recorded)

The account receivable  is computed below:

= Sales revenue - sales revenue × fee percentage given

= $500 - $500 × 2%

= $500 - $10

= $490

And, the credit card expense is

= Sales revenue × fee percentage given

=  $500 × 2%

= $10