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Q19E

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Horngren'S Financial And Managerial Accounting
Found in: Page 417

Short Answer

Journalizing credit card sales 2018

Sep. 1 Recorded National Express credit card sales for $96,000, net of processor fee of 1%. Ignore Cost of Goods Sold.

15 Recorded ValueMax credit card sales of $80,000. Processor charges a 1.5% fee. ValueMax charges the fee at the end of the month, therefore Marathon uses the gross method for these credit card sales. Ignore Cost of Goods Sold.

30 ValueMax collected the fees for the month of September. Assume the

September 15 transaction is the only ValueMax credit card sale. Journalize all entries required for Marathon Running Shoes.

The credit card expense is $960.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of credit card

A credit card is a particular type of card that facilities customers to buy goods on credit.

Step 2: Journal entries for credit card sale

Date

Particulars

Debit

Credit

2018

September 1

Cash

$95,040

Credit Card Expense

$960

Sales Revenue

$96,000

(Being entry of the credit card sale)

September 15

Cash

$96,000

Sales Revenue

$96,000

(Being entry of the credit card sale)

September 30

Credit Card Expense

$960

Cash

$960

(Being entry for the payment of processing fee)

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