Business, 26.03.2021 01:30 jbryant071405

Exercise 7-2 Accounting for credit card sales LO C1 Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $4,500 (that had cost $3,326) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $4,600 (that had cost $2,981) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

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Answer from: jose0765678755

See the journal entries below.

Explanation:

We first calculate the following:

Suntrust Credit Card expenses = $4,500 * 4% = $180

Continental Credit Card expenses = $4,600 * 2.5% = $115

The journal entries will therefore look as follows:

Levine Company

Journal Entries

Date General Journal Debit ($) Credit ($)

Apr. 8 Cash (Suntrust Credit Card) 4,320

Credit Card Expense 180

Sales Revenue 4,500

(To record sale of goods using Suntrust Credit Card at 4% fee.)

Cost of Goods Sold 3,326

Merchandise Inventory 3,326

(To record the cost of goods sold.)

Apr. 12 Cash (Continental Credit Card) 4,485

Credit Card Expense 115

Sales Revenue 4,600

(To record sale of goods using Continental credit card at 2.5% fee.)

Cost of Goods Sold 2,981

Merchandise Inventory 2,981

(To record the cost of goods sold.)

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Exercise 7-2 Accounting for credit card sales LO C1 Levine Company uses the perpetual inventory syst...

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