A company allows its customers to use bank credit cards to charge purchases. Whe

Question

A company allows its customers to use bank credit cards to charge purchases. When customers use the credi cards, the net amount is deposited in the company's checking account. The company also is charged a 2.596 service charge for these credit card sales. Assume that on April 13, the company sold $25,000 worth of merchandise to customers who used credit cards. Prepare the company's journal entry to record the credit c. sales for April 13 assuming the company deposited the receipts that same day.

Explanation / Answer

Answer:

April 13

Cash A/C Dr.                       $24,375
Credit Card Expense A/C Dr. $ 625
            To Sales A/C $ 25,000

$25,000 x .025 = $625 Credit Card expense

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