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7 June, 21:41

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

(1) Sold $20,000 of merchandise, which cost $15,000, on Mastercard credit cards. Mastercard charges a 5% fee.

(2) Sold $5,000 of merchandise, which cost $3,000, on an assortment of bank credit cards. These cards charge a 4% fee.

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  1. 7 June, 22:08
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    The journal entries are shown below:

    1. Cash A/c Dr $19,000

    Credit card expense A/c Dr $1,000 ($20,000 * 5%)

    To Sales A/c $20,000

    (Being cash is received)

    Cost of goods sold A/c Dr $15,000

    To Merchandise inventory A/c $15,000

    (Being inventory is sold at cost)

    2. Accounts receivable A/c Dr $4,800

    Credit card expense A/c Dr $200 ($5,000 * 4%)

    To Sales A/c $5,000

    (Being merchandise is sold on credit)

    Cost of goods sold A/c Dr $3,000

    To Merchandise inventory A/c $3,000

    (Being inventory is sold at cost)

    Cash A/c Dr $4,800

    To Accounts receivable $4,800

    (Being cash is received)
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