Ask Question
19 August, 14:40

Exercise 7-14A Recording Credit Card Sales LO 7-6 Luna Company accepted credit cards in payment for $6,950 of services performed during July Year 1. The credit card company charged Luna a 3.75 percent service fee; it paid Luna as soon as it received the invoices. Required. Prepare the general journal entry to record the service revenue. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.)

+1
Answers (1)
  1. 19 August, 17:56
    0
    See the explanation below:

    Explanation:

    Interest expenses = $6,950 * 3.75% = $261

    Cash received = $6,950 - $261 = $6,689

    The payment an be in two forms; it can be immediate or delayed. The two are done below:

    a. Journal Entries for Immediate payment

    Details Dr ($) Cr ($)

    Cash 6,689

    Card expenses 261

    Sales 6,950

    b. Journal Entries for delayed payment

    When the transaction is carried out, we have:

    Details Dr ($) Cr ($)

    Account receivables 6,689

    Card expenses 261

    Sales 6,950

    When the payment is received, we have:

    Details Dr ($) Cr ($)

    Cash 6,689

    Account receivables 6,689
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Exercise 7-14A Recording Credit Card Sales LO 7-6 Luna Company accepted credit cards in payment for $6,950 of services performed during ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers