Levine Company uses the perpetual inventory system and allowscustomers to use two credit cards in charging purchases. With theSuntrust Bank Card, Levine receives an immediate credit to itsaccount when it deposits sales receipts. Suntrust assesses a 4%service charge for credit card sales. The second credit card thatLevine accepts is the Continental Card. Levine sends itsaccumulated receipts to Continental on a weekly basis and is paidby Continental about a week later. Continental assesses a 2.5%charge on sales for using its card.
Apr. 8 Sold merchandise for $4,100 (that had cost $3,030) and acceptedthe customer's Suntrust Bank Card. The Suntrust receipts areimmediately deposited in Levine's bank account.
12 Sold merchandise for $4,550 (that had cost $2,948) and acceptedthe customer's Continental Card. Transferred $4,550 of credit cardreceipts to Continental, requesting payment.
20 Received Continental's check for the April 12 billing, less theservice charge.
Prepare journal entries to record the above selected credit cardtransactions of Levine Company.
Levine Company uses the perpetual inventory system and allowscustomers to use two credit cards in charging purchases. With theSuntrust Bank Card, Levine receives an immediate credit to itsaccount when it deposits sales receipts. Suntrust assesses a 4%service charge for credit card sales. The second credit card thatLevine accepts is the Continental Card. Levine sends itsaccumulated receipts to Continental on a weekly basis and is paidby Continental about a week later. Continental assesses a 2.5%charge on sales for using its card. |
| Apr. | 8 | Sold merchandise for $4,100 (that had cost $3,030) and acceptedthe customer's Suntrust Bank Card. The Suntrust receipts areimmediately deposited in Levine's bank account. |
| 12 | Sold merchandise for $4,550 (that had cost $2,948) and acceptedthe customer's Continental Card. Transferred $4,550 of credit cardreceipts to Continental, requesting payment. | |
| 20 | Received Continental's check for the April 12 billing, less theservice charge. |
Prepare journal entries to record the above selected credit cardtransactions of Levine Company. |
