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28 November, 06:54

Luna Company accepted credit cards in payment for $6,000 of services performed during July Year 1. The credit card company charged Luna a 3.25 percent service fee; it paid Luna as soon as it received the invoices. Required a. Prepare the general journal entry to record the service revenue.

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  1. 28 November, 07:05
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    1.

    a.

    Dr. Account Receivable $5,805

    Dr. Service charges $195

    Cr. Service revenue $6,000

    2.

    Dr. Cash $5,805

    Cr. Accounts receivable $5,805

    Explanation:

    1. Assuming all the sales are performed on account first Then cash is received after issuance of invoice.

    Service revenue $6,000

    Less: Credit card expenses $ (195)

    Net income $5,805

    Service charges = $6,000 x 3.25% = $195
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