Question

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

Sold $22,000 of merchandise, that cost $16,600, on MasterCard credit cards. MasterCard charges a 5% fee.

Sold $5,200 of merchandise, that cost $3,100, on an assortment of bank credit cards. These cards charge a 4% fee.

Answer 1

Solution:

Journal Entries
Event	Particulars	Debit	Credit
1a	Cash Dr	$20,900.00
	Credit card expense Dr ($22,000*5%)	$1,100.00
	To Sales revenue		$22,000.00
	(To record sales)
1b	Cost of goods sold Dr	$16,600.00
	To inventory		$16,600.00
	(To record cost of goods sold)
2a	Cash Dr	$4,992.00
	Credit card expense Dr ($5,200*4%)	$208.00
	To Sales revenue		$5,200.00
	(To record sales)
2b	Cost of goods sold Dr	$3,100.00
	To inventory		$3,100.00
	(To record cost of goods sold)