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In: Accounting

Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $5,000 (that had cost...

Levine Company uses the perpetual inventory system.

Apr. 8 Sold merchandise for $5,000 (that had cost $3,695) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee.
12 Sold merchandise for $3,400 (that had cost $2,203) and accepted the customer's Continental Card. Continental charges a 2.5% fee.


Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

Solutions

Expert Solution

Date Account titles and Explanations Debit Credit
April 8 Cash $ 4,800
Credit Card Expense
( $ 5,000 x 4% )
$ 200
             Sales $ 5,000
(To record the merchandise Sold )
April 8 Cost of Goods Sold $ 3,695
              Merchandise Inventory $ 3,695
(To record the Cost of merchandise Sold )
April 12 Cash $ 3,315
Credit Card Expense
( $ 3,400 x 2.5% )
$ 85
               Sales $ 3,400
(To record the merchandise Sold )
April 12 Cost of Goods Sold $ 2,203
                  Merchandise Inventory $ 2,203
(To record the Cost of merchandise Sold )

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