Question

McGregor Company allows customers to pay with credit cards. The credit card company charges McGregor 3% of the sale. When a customer uses a credit card to pay McGregor $200 for services provided, McGregor would:________-

Answer 1

Answer:

McGregor would Debit Service Fee Expense for $6.

Explanation:

Data provided in the question:

Fee charged by the credit card company = 3% of the sales

Amount of payment made by the customer to McGregor for the service = $200

Now,

The amount of fees charged on the transaction bu the credit card company

= 3% of $200

= 0.03 × $200

= $6

Since, this fees is an expense for the McGregor

Hence,

McGregor would Debit Service Fee Expense for $6.