Question

Prepare the necessary journal entries.
ABC Corp sold merchandise on its store credit card for			$4,000
The cost of the merchandise sold was		$2,400
The company uses a perpetual inventory system.
ABC Corp, recorded interest on past due store credit card accounts of				$100
A restaurant is the site for a large company party.   The bill totals $5,200 and is charged by
the company on a Mastercard.
Assume a 4% service fee is charged by Mastercard.
Record the journal entry that the restaurant would make to record this transaction.

Answer 1

	Account Titles and Explanation	Debit	Credit
1	Cash	4,000
	Sales		4,000
	Cost of Goods Sold	2,400
	Inventory		2,400
2	Accounts Receivable	100
	Interest Revenue		100
3	Cash	4,992
	Service Charge Expense (5,200 x 4%)	208
	Sales		5,200