Question

McGregor Company allows customers to pay with credit cards. The credit card company charges McGregor 3% of the sale. When a customer uses a credit card to pay McGregor $1,300 for services provided, McGregor would:

Answer 1

Debit Service fees expenses $39

Step-by-step explanation:

The journal entry is shown below:

Cash account $1,261

Service fees expenses (3% of $1,300) $39

Service revenue $1,300

(Being the cash is recorded)

here cash and expense is debited as it increased the assets and expense and credited the service revenue as it also increased the revenue