MacKenzie Company sold $360 of merchandise to a customer who used a Regional Bank credit card....

MacKenzie Company sold $360 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 1.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made. The journal entry to record this sale transaction would be:

Debit Cash of $360 and credit Sales $360.
Debit Cash of $360 and credit Accounts Receivable $360.
Debit Accounts Receivable $360 and credit Sales $360.
Debit Cash $356.40; debit Credit Card Expense $3.60 and credit Sales $360.
Debit Cash $356.40 and credit Sales $356.40.

Expert Solution

The correct entry to record this sale is:

D)Debit Cash $356.40; debit Credit Card Expense $3.60 and credit Sales $360.

The sale amount is $360 but cash received = 99% i.e. 99%*360 = $356.40

Credit Sales = $360

and the credit card expense = $360*1% = $3.60

ekkarill92 answered 2 years ago

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