Levine Company used the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Sunstrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts.
Suntrust asses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continetnal Card. Levine sends it accumulated asses a 2.5% charge on sales for using its card.
Prepare journal entries to record the following selected credit card transactions of
Levine Company.
April 8 -Sold merchandise for $8,400 ( that had cost $6,000) and accepted the customers Suntrust Bank Card. The suntrust receipts are immediately deposited in Levine's bank account.
April 12- Sold merchandise for $5,600(that had cost $3,500) and accepted the customer's Continetnal Card. Transferred $5,600 of credit card receipts to Continental requesting payment.
April 20- Received Continetal's check for the April 12 billing, less the service charge.