Question

MacKenzie Company sold $640 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 2.0% 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:A)Debit Cash of $640 and credit Sales $640.B)Debit Cash of $640 and credit Accounts Receivable $640.C)Debit Accounts Receivable $640 and credit Sales $640.D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640.E)Debit Cash $627.20 and credit Sales $627.20.

Answer 1

Answer:

The journal entry to record this sale transaction would be: D)Debit Cash $627.20; debit Credit Card Expense $12.80 and credit Sales $640

Explanation:

Regional Bank deducts a 2.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made.

The amount of service charge for sales =  2.0% x $640 = $12.8

In MacKenzie Company, the journal entry to record this sale transaction would be:

Debit Cash $627.20

Debit Credit Card Expense $12.80

Credit Sales $640