Question

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 25% charge on sales for using its card. Apr. 8 Sold merchandise for $7,500 (that had cost $5,543) and accepted the customer's Suntrust Bank Card. 12 Sold merchandise for $4,600 (that had cost $2,981) and accepted the customer's Continental Card. Prepare journal entries to record the above selected credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

Answer 1

Answer
Journal entry :
Date	account and explanation	debit	credit
Apr-08	Cash (7500*96%)	$     7,200
	Credit card expense	$        300
	Sales revenue		$     7,500
	(To record sales)
	cost of goods sold	$     5,543
	Inventory		$     5,543
	(To record cost of goods sold)
Apr-12	Cash (4600*97.5%)	$     4,485
	Credit card expense	$        115
	Sales revenue		$     4,600
	(To record sales)
	cost of goods sold	$     2,981
	Inventory		$     2,981
	(To record cost of goods sold)
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