Question

MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 4% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment immediately. The journal entry to record this sale transaction would be: O Debit Cash of $180 and credit Sales $180. O Debit Cash of $180 and credit Accounts Receivable-Regional $180. Debit Accounts Receivable-Regional S172.80; debit Credit Card Expense $7.20 and credit Sales $180. Debit Cash $172.80; debit Credit Card Expense $7.20 and credit Sales $180. O Debit Cash $172.80 and credit Sales $172.80. QUESTION 25 A company borrowed $10,000 by signing a 180-day promissory note at 9%. The total to be paid at maturity of the note is: (Use 360 days a year.) $10,450 $10,900 $10,075 $11,800 $10,300

Answer 1

Answer:

Debit Cash $172.80; debit Credit Card Expense $7.20 and credit Sales $180

$10,450

Explanation:

The journal entry is as follows

Cash Dr $172.80  

Credit card expenses Dr $7.20       ($180 × 4%)

        To Sales revenue $180

(Being the sale transaction is recorded)

The total amount paid at maturity is  

= Borrowed amount + Borrowed amount × rate of interest × number of days ÷ total number of days  

= $10,000 + $10,000 × 9% × 180 days ÷ 360 days

= $10,000 + $450

= $10,450

Answer 2

Answer: A, Debit Cash of $180 and Credit sales of $180.

Explanation:

The above transaction is due to the fact that MacKenzie company is the company that made the sales.

$10,000 for 180days promissory note @ 9%. Since the 9% is an annual rate and the loan is for 180day we calculate thus:

10,000*9/2 = 10,000 * 4.5%=$ 10,450