Question

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system). Sold $37,000 of merchandise, which cost $28,600, on Mastercard credit cards. Mastercard charges a 5% fee.

Sold $6,700 of merchandise, which cost $3,850, on an assortment of bank credit cards. These cards charge a 4% fee. Sold $6,700 of merchandise on an assortment of bank credit cards. These cards charge a 4% fee. Enter journal entry.

Answer 1

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Credit card sales transactions
Journal Entries
Account	Debit $	Credit $	Remarks
Cash	35,150.00		This is $ 37,000*95%.
Bank charges/ Credit card expenses	1,850.00		This is $ 37,000*5%.
Sales		37,000.00
Cost of goods sold	28,600.00
Merchandise Inventory		28,600.00
Cash	6,432.00		This is $ 6,700*96%.
Bank charges/ Credit card expenses	268.00		This is $ 6,700*4%.
Sales		6,700.00
Cost of goods sold	3,850.00
Merchandise Inventory		3,850.00