Exercise 7-2 Accounting for credit card sales C1 Levine Company uses the perpetu

Question

Exercise 7-2 Accounting for credit card sales C1 Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, a 4% service charge for credit card sales is assessed. The second credit card that Levine accepts is the Continental Card. Continental assesses a 2.5% charge on following selected credit card transactions of Levine Company sales for using its card. Prepare journal entries to record the 8 2 Sold merchandise for $5,600 (that had cost S3.500) and accepted the customer's Continental Card Apr. Sold merchandise for $8,400 (that had cost S6,000) and accepted the customer's Suntrust Bank Card.

Explanation / Answer

(credit card expense = $8,400*4%=>$336) cash received =$8400-$336=>$8,064)

date general journal debit credit Apr 8 Cash a/c $8,064 Credit card expense a/c $336 ............To Sales a/c $8,400

(credit card expense = $8,400*4%=>$336) cash received =$8400-$336=>$8,064)

apr 8 cost of goods sold $6,000 ..........To merchandise inventory $6,000 Apr 12 Cash a/c $5,460 credit card expense a/c $140 ............To sales a/c $5,600 (credit card expense = $5600*2.5%=>$140, cash = 5600-140=>$5,460) apr 12 Cost of goods sold a/c $3,500 .........To Merchandise inventory a/c $3,500

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