Question

MacKenzie Company sold $680 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 4.0% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment immediately. The journal entry to record this sale transaction would be:

Answer 1

Total Sales value = $680

Service charge percentage = 4%

Credit card expenses = Total Sales Value * Service Charge percentage = $680 * 4% = $27.20

Net amount received from credit card company = Total sales value - Credit card expenses = $680 - $27.20 = $652.80

The Journal entry to record sale transaction would be will be as follows:

Date Particulars Debit Credit

Cash or Bank $652.80

Credit card expenses $27.20

Sales $680

(Being sales made through card)