Question

MacKenzie Company sold $620 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 5.0% 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

DR Cash $589

DR Credit Card expense $31

CR Sales $620

(To record sales via credit card)

Working

Cash

= 620 * ( 1 - 5%)

= $589

Credit Card Expense

= 620 * 5%

= $31