Question

8 Sold merchandise for $3,500 (that had cost $2,587) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $5,200 (that had cost $3,370) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

Answer 1

Answer:

Apr 08

Dr Credit card expense 3,500

Cr Sales 3,500

Apr 08

Dr Cost of goods sold 2,587

Cr Merchandise inventory 2,587

Apr 12

Dr Accounts receivable—Continental 5,070

Dr Credit card expense 130

Cr Sales 5,200

Apr 12

Dr Cost of goods sold 3,370

Cr Merchandise inventory 3,370

Apr 20

Dr Cash 5,070

Cr Accounts receivable—Continental 5,070

Explanation:

Journal Entry

Apr 08

Dr Credit card expense 3,500

Cr Sales 3,500

Apr 08

Dr Cost of goods sold 2,587

Cr Merchandise inventory 2,587

Apr 12

Dr Accounts receivable—Continental 5,070

Dr Credit card expense 130

Cr Sales 5,200

Apr 12

Dr Cost of goods sold 3,370

Cr Merchandise inventory 3,370

Apr 20

Dr Cash 5,070

Cr Accounts receivable—Continental 5,070

Apr 12 Credit card expense = $5,200 × 0.025 = $130