Question

MacKenzie Company sold $300 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 1.5% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made. The journal entry to record this sale transaction would be: Multiple Choice Debit Cash $295.50; debit Credit Card Expense $4.50 and credit Sales $300. Debit Accounts Receivable $300 and credit Sales $300. Debit Cash of $300 and credit Sales $300. Debit Cash $295.50 and credit Sales $295.50.

Answer 1

Answer:

The journal entry to record the sale transaction would be to "debit cash $295.50; debit credit card expense $4.50 and credit sales $300"

Explanation:

The credit card expense of $4.5 ( i.e, Sales of Merchandise $300 multiplied by Bank service charge deduction 1.5%) is a loss.

Therefore, It should be debited.