Question

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 money transfer to its account when it processes sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continental Card. Levine batches its credit sales data to Continental on a daily basis, and the money is transferred to its account about 4 to 7 business days later. Continental assesses a 2.5% charge on sales for using its card.
  

Apr.		8		Sold merchandise for $10,000 (that had cost $7,390) and accepted the customer's Suntrust Bank Card. Suntrust immediately transfers funds from the credit sales to Levine’s bank account.
		12		Sold merchandise for $8,300 (that had cost $5,378) and accepted the customer's Continental Card. Levine batches $8,300 of credit card sales data 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.

1.)Record sale of merchandise for $10,000 and accepted the customer's Suntrust Bank Card. Suntrust receipt's are immediately deposited in Levine's bank account.

2.)Record the cost of goods sold, $7,390.

3.)Record sale of merchandise for $8,300 and accepted the customer's Continental Card. Transferred $8,300 of credit card receipts to Continental, requesting payment.

4.)Record the cost of goods sold, $5,378.

5.)Received Continental's check for the April 12 billing, less the service charge.

Answer 1

	Levine Company
	General Journal
Date	Journal	Amount (DR)	Amount (CR)
8-Apr	Cash=($10000*96%)	$                         9,600.00
	Credit card expense($10000*4%)	$                             400.00
	To Sales		$                               10,000.00
	(Being amount of sales while accepting Suntrust Bank Card)
8-Apr	Cost of goods sold	$                         7,390.00
	To Merchandise Inventory		$                                 7,390.00
	(Being amount of cost of goods sold)
12-Apr	Accounts receivble-Continental=($8300*97.5%)	$                         8,092.50
	Credit card expense($8300*2.5%)	$                             207.50
	To Sales		$                                 8,300.00
	(Being amount of sales while accepting continental card)
12-Apr	Cost of goods sold	$                         5,378.00
	To Merchandise Inventory		$                                 5,378.00
	(Being amount of cost of goods sold)
20-Apr	Cash	$                         8,092.50
	To Accounts Receivable-Continental		$                                 8,092.50
	(Being amount received from Continental on April 12th Sale)