3. 3.80 points Exercise 7-2 Accounting for credit card sales LO C1 Levine Compan

Question

3. 3.80 points Exercise 7-2 Accounting for credit card sales LO C1 Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continental Card. Levine sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its card Apr. 8 Sold merchandise for $7,200 (that had cost $5,321) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account. 12 Sold merchandise for $7,800 (that had cost $5,054) and accepted the customer's Continental Card Transferred $7,800 of credit card receipts to Continental, requesting payment. 20 Received Continental's check for the April 12 billing, less the service charge Prepare journal entries to record the above selected credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 2 3 4 Sold merchandise for $7,200 (that had cost $5,321) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account Note: Enter debits before credits Date General Journal Debit Credit Apr 08 Record entry Clear entry View general journal

Explanation / Answer

Date Accounts title and explanations Debit $ Credit $ 8-Apr Cash Account Dr. 6912 Card Service expense Dr. 288      Sales rvenue 7200 8-Apr Cost of goods sold Dr. 5321     Inventory 5321 12-Apr Continental card Receivable Dr. 7800      sales revenue 7800 12-Apr Cost of goods sold Dr. 5054     Inventory 5054 20-Apr cash Account Dr. 7605 Credit service expense Dr. 195      Continental Card recievable 7800

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