Question

Question Recording credit card and debit card sales Restaurants do a large volume of business with credit and debit cards. Suppose Summer,

Sand, and Castles Resort restaurant had these transactions on January 28, 2018: National Express credit card sales $ 10,800 Value Card debit card sales 10,000. Requirements

1. Suppose Summer, Sand, and Castles Resort’s processor charges a 2% fee and deposits sales net of the fee. Journalize these sales transactions for the restaurant.

2. Suppose Summer, Sand, and Castles Resort’s processor charges a 2% fee and deposits sales using the gross method. Journalize these sales transactions for the restaurant.

 

Answer 1

Step 1: Definition of credit card

A credit card is a card that allows users to purchase goods on credit.

Step 2: Using the net method

The net method is a method to record the revenue of the credit card sale in which total sale less prescribing fees equals cash.

 

Date Particulars Debit Credit

1. Bank $20,384

Credit Card Expense $416

Sales $20,800

(To record credit card sales)

 

Step 3: Using the gross method

The gross method is a method in which total sale is directly deposited within a few days. The amount to prescribed fees is deducted at the end of the month

Date Particulars Debit Credit

2. Bank $20,800

Sales $20,800

(To record the credit card sales)

Credit Card Expenses $416

Bank $416

(Payment of credit card expenses)

 

 

Bank account debited with $20,384.