Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

(1) sold $20,000 of merchandise, which cost $15,000, on mastercard credit cards. mastercard charges a 5% fee.
(2) sold $5,000 of merchandise, which cost $3,000, on an assortment of bank credit cards. these cards charge a 4% fee.

If the company sold $20,000 of merchandise, which cost $15,000, on Mastercard credit cards. Mastercard charges a 5% fee. The appropriate journal entries to record the credit card sales transaction will be:

Journal entries

1. Debit Cash $19,000

[(100%-5%)×$20,000]

Debit Card expense $1,000

(5%×$20,000)

Credit Sales $20,000

Debit Cost of goods sold $15,000

Credit Merchandise Inventory $15,000

2.  Debit Cash $4,800

[(100%-4%)×$5,000]

Debit Card expense $200

(4%×$5,000)

Credit Sales $5,000

Debit Cost of goods sold $3,000

Credit Merchandise Inventory $3,000

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Explanation:

The journal entries are shown below:

1. Cash A/c Dr $19,000

  Credit card expense A/c Dr  $1,000            ($20,000 × 5%)

        To Sales A/c                             $20,000

(Being cash is received)

Cost of goods sold A/c Dr $15,000

        To Merchandise inventory A/c $15,000

(Being inventory is sold at cost)

2. Accounts receivable A/c Dr $4,800

   Credit card expense A/c Dr  $200          ($5,000 × 4%)

        To Sales A/c                             $5,000

(Being merchandise is sold on credit)

Cost of goods sold A/c Dr $3,000

        To Merchandise inventory A/c $3,000

(Being inventory is sold at cost)

Cash A/c Dr $4,800

      To Accounts receivable $4,800

(Being cash is received)