Question

A company allows its customers to use bank credit cards to charge purchases. When customers use the credit cards, the net amount is deposited in the company's checking account, less a 2.5% service charge. Assume that on April 13, the company sold $20,000 worth of merchandise to customers who used credit cards. Prepare the company's journal entry to record the credit card sales for April 13 assuming the company deposited the receipts that same day.

Answer 1

Date	Accounts and Explanation	Debit ($)	Credit ($)
13-Apr	Cash A/c [$20,000 - $500]	19,500
	Credit Card Expenses A/c [$20,000 x 2.50%]	500
	To Sales A/c		20,000
	[Entry to record the credit card sales for April 13]