Question

Restaurants do a large volume of business by credit and debit cards. Suppose Spring Garden Salads restaurant had these transactions on January​ 28, 2016​: National Express credit card sales $10,500 ValueCard debit card sales 6,000 Requirements 1. Suppose Spring Garden Salads' processor charges a 3​% fee and deposits sales net of the fee. Journalize these sales transactions for the restaurant. 2. Suppose Spring Garden Salads' processor charges a 3​% fee and deposits sales using the gross method. Journalize these sales transactions for the restaurant.

Answer 1

Answer and Explanation:

The journal entries are shown below:

1. Processor charges - Credit card expense Dr  ($10,500 × 3%) $315

  Cash Dr  $10,185

                To Sales Revenue $10,500

(Being the credit card expense is recorded)

For recording this we debited the cash and expenses as it increased the asset and expenses  and credited the sales revenue as it also increased the revenue  

Processor charges - debit card expense Dr  ($6,000 × 3%) $180

  Cash Dr  $5,820

                To Sales Revenue $6,000

(Being the debit card expense is recorded)

For recording this we debited the cash and expenses as it increased the asset and expenses  and credited the sales revenue as it also increased the revenue  

2.  Cash Dr  $10,500

          To Sales Revenue $10,500

(Being the cash receipt is recorded)

For recording this we debited the cash as it increased the asset and credited the sales revenue as it also increased the revenue  

Cash Dr  $6,000

          To Sales Revenue $6,000

(Being the cash receipt is recorded)

For recording this we debited the cash as it increased the asset and credited the sales revenue as it also increased the revenue