Question

Luna Company accepted credit cards in payment for $6,000 of services performed during July Year 1. The credit card company charged Luna a 3.25 percent service fee; it paid Luna as soon as it received the invoices. Required a. Prepare the general journal entry to record the service revenue.

Answer 1

1.

a.

Dr. Account Receivable $5,805

Dr. Service charges $195

Cr. Service revenue $6,000

2.

Dr. Cash $5,805

Cr. Accounts receivable $5,805

Step-by-step explanation:

1. Assuming all the sales are performed on account first Then cash is received after issuance of invoice.

Service revenue $6,000

Less: Credit card expenses $ (195)

Net income $5,805

Service charges = $6,000 x 3.25% = $195