Question

Kensington Company sold $7,000 of merchandise to customers who charged their purchases with a bank credit card. Kensington's bank charges it a 5% fee. Which one of the following is part of the journal entry to record this transaction?

1) Debit Accounts Receivable for $7,000
2) Credit Sales for $7,000
3) Credit Accounts Receivable for $7,000
4) Debit Sales for $7,000

Answer 1

The correct part of the journal entry to record this transaction is to debit Accounts Receivable for $7,000.

Step-by-step explanation:

The correct part of the journal entry to record this transaction would be:

1. Debit Accounts Receivable for $7,000

This is because Kensington Company sold merchandise to customers who charged their purchases using a bank credit card. When customers use a credit card, the company records the transaction as an account receivable. The amount charged by the bank as a fee is not recorded in the journal entry.