Question

Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, a 4% service charge for credit card sales is assessed. The second credit card that Levine accepts is the Continental Card. Continental assesses a 2.5% charge on sales for using its card. Prepare journal entries to record the following selected credit card transactions of Levine Company. Sold merchandise for $8, 400 (that had cost $6,000) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account. Sold merchandise for $5, 600 (that had cost $3, 500) and accepted the customer's Continental Card. Transferred $5, 600 of credit card receipts to Continental, requesting payment. Received Continental's check for the April 12 billing, less the service charge.

Answer 1

Answer:

Answer text is available please see the attachment  file for easy understanding

Sr.  Date            Levine Company                Debit            Credit

                     Journal    

1 Not Given      Cash                                       $8,064  

              Credit Card Expense-Suntrust                $336  

                       Sales                                                            $8,400  

   

2 Not Given Cost of Goods Sold                  $6,000  

                 Merchandise Inventory                                    $6,000  

   

3 Not Given Accounts Receivable-Continental  $5,460  

                 Credit Card expense                         $140  

                   Sales                                                            $5,600  

   

4 Not Given Cost of goods Sold                        $3,500  

                 Merchandise Inventory                                     $3,500  

   

5 12-Apr         Cash                                                $5,460  

       Accounts Receivable-Continental                              $5,460