Answer:
Debit Cash/Bank $48,500
Debit Service charge (p/l) $48,500
Credit Accounts receivable $50,000
Being entries to account for credit card payment of debt due from customers.
Explanation:
The credit card payment is a form of cash and cash equivalent that may be accepted by a company in place of debt owed by another company (a customer).
This is usually at a fee and may be done to ease the company's liquidity. The actual receivable will then be collected from the customer by the credit card company. This is a form of debt factoring.
Service charge
= 3% * $50,000
= $1,500
Amount received = $50,000 - $1,500
= $48,500
The accounts to be adjusted include cash/bank account, service charge (p/l) and accounts receivable.
