[moonkhan]

Levine Company uses the perpatual systems and allows costomers to use two credit cards in charging purchases. With the omni Bank Card, Levine receives an immidiate credit to its accont when it deposits sales recepts. Omni assesses a 4% service charge for credit card sales . The second credit card that Levines accepts is the Continental Card.Levine sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its cards. Prepare journal entries to record the following selected credit card transactions of Levine Company

Apr. 9 Sold merchandise for $8400 ( that had cost $6000) and accepted the customer's Omni Bank Card. The Omni receipts are immediately deposited in Levine's bank account.

16 . Sold merchandise for $5,600 ( that had cost $3,500 ) and accepted the customer's Continential Card. Transferred $5,600 of credit card receipts to Continental requesting payments.

20. Received Continental 's check for the April 16 billing less the service charges.

Help me .:confused:

[codyman144]

I am not going to do the question for you but here are some hints.

4/19 You have to record the cash received, revenue generated and the fee paid

4/16 You have earned revenue and have incurred a fee. But in this case you don't have the cash yet. What do you do when revenue is earned but cash is not received?

4/20 Now you have the cash from the revenue earned on 4/16. How would you normally record that kind of transaction?

[moonkhan]

Date Account Title and Description PR Debit Credit
April 12 Account Receivable-Continental Company 5,460
Credit Card Expense 140
Cr. Sales 5,600
To record credit card sales less 2.5% credit
Card expense.
Am I right with journal entry of 4/16

[codyman144]

Assuming the first two entries are debts yes you are correct.

P.S. Please don't mark my answers wrong without asking for clarification first. I am new to the site and now all I have is a bad rating.

[moonkhan]

I am sorry, You should tell me that you are new. Well thank you for your help