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Accounting for Credit Card Sales
Chassoul & Company pays a two percent credit card fee on all credit sales, and receives a cash deposit immediately following each credit card transaction.
If credit sales for the company total $55,000 on January 15, what journal entry should be recorded to recognize the receipt of cash and the credit card fee expense?
Debit Cash $53,900; debit Credit Card Fee Expense $1,100
Debit Cash $53,900; credit Credit Card Fee Expense $1,100
Debit Cash $56,100; debit Credit Card Fee Expense $1,100
Debit Cash $56,100; credit Credit Card Fee Expense $1,100
Expert Answer
Credit card fee expense=$55,000*2%=$1,100
journal entry to record transaction is
Debit Cash $53,900; debit Credit Card Fee Expense $1,100 and credit sales $55,000
So the option is A.Debit Cash $53,900; debit Credit Card Fee Expense $1,100
