Question

Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. )

A.	Sold merchandise for cash, $27,700. The cost of the goods sold was $14,681.
B.	Sold merchandise on account, $250,000. The cost of the merchandise sold was $132,500.
C.	Sold merchandise to customers who used MasterCard and VISA, $161,700. The cost of the merchandise sold was $85,701.
D.	Sold merchandise to customers who used American Express, $72,000. The cost of the merchandise sold was $38,160.
E.	Received an invoice from National Clearing House Credit Co. for $8,610, representing a service fee paid for processing MasterCard, VISA, and American Express sales. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 220 Unearned Rent 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends REVENUE 410 Sales 610 Rent Revenue EXPENSES 510 Cost of Goods Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 526 Salaries Expense 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense Journalize the entries for the transactions on December 31. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

	Account title and explanation	Debit	Credit
A	Cash	$27,700
	Sales revenue		$27,700
	[To record cash sales]
	Cost of goods sold	$14,681
	Inventory		$14,681
	[To record cost of goods sold]
B	Accounts receivable	$250,000
	Sales revenue		$250,000
	[To record credit sales]
	Cost of goods sold	$132,500
	Inventory		$132,500
	[To record cost of goods sold]
C	Cash	$161,700
	Sales revenue		$161,700
	[To record MasterCard and VISA card sales]
	Cost of goods sold	$85,701
	Inventory		$85,701
	[To record cost of goods sold]
D	Cash	$72,000
	Sales revenue		$72,000
	[To record American express card sales]
	Cost of goods sold	$38,160
	Inventory		$38,160
	[To record cost of goods sold]
E	Credit card expense	$8,610
	Accounts payable		$8,610
	[To record credit card fee expense]

*Assumed that cash immediately deposited from MasterCard,VISA, and American express card payments sales.