Question

Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $3,600 (that had cost $2,660) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $9,400 (that had cost $6,091) 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 $3,456

Credit card expense $144 ($3,600 ×4%)

To Sales $3,600

(Being the sales is recorded)

Cost of goods sold $2,660

To Merchandise inventory $2,660

(Being the cost of merchandiser is recorded)

On April 12

Accounts receivable - Continental $9,165

Credit card expense $235 ($9,400 × 2.5%)

To Sales $9,400

(Being the sales is recorded)

Cost of goods sold $6,091

To Merchandise inventory $6,091

(Being the cost of merchandiser is recorded)