Question

Apr. 8 Sold merchandise for $9,500 (that had cost $7,021) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $7,400 (that had cost $4,795) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

Answer 1

Answer and Explanation:

The journal entries are shown below:

On April 8

Cash $9,120

Credit card expense $380 ($9,500 × 0.04)

To Sales $9,500

(Being sale is recorded)

Costs of goods sold $7,021

To Merchandise inventory $7,021

(Being the cost of goods sold is recorded)

On April 12

Cash $7,215

Credit card expense $185 ($7,400 × 2.5%)

To Sales $7,400

(Being sale is recorded)

Costs of goods sold $4,795

To Merchandise inventory $4,795

(Being the cost of goods sold is recorded)