Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine 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 card.
April 8. Sold merchandise for $8,400 (that had cost $6,000) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account.
12. Sold merchandise for $5,600 (that had cost $3,500) and accepted the customer's Continental Card. Transferred $5,600 of credit card receipts to Continental, requesting payment.
20. Received Continental's check for the April 12 billing, less the service charge.
Prepare journal entries to record the above-selected credit card transactions of Levine Company.
Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine 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 card.
April 8. Sold merchandise for $8,400 (that had cost $6,000) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account.
12. Sold merchandise for $5,600 (that had cost $3,500) and accepted the customer's Continental Card. Transferred $5,600 of credit card receipts to Continental, requesting payment.
20. Received Continental's check for the April 12 billing, less the service charge.
Prepare journal entries to record the above-selected credit card transactions of Levine Company.
For unlimited access to Homework Help, a Homework+ subscription is required.
Related questions
Atlas Co. allows select customers to makepurchases on credit. Its other customers can use either of twocredit cards: Zisa or Access. Zisa deducts a 4.0% service chargefor sales on its credit card and credits the bank account of Atlasimmediately when credit card receipts are deposited. Atlas depositsthe Zisa credit card receipts each business day. When customers useAccess credit cards, Atlas accumulates the receipts for severaldays before submitting them to Access for payment. Access deducts a3.0% service charge and usually pays within one week of beingbilled. Atlas completes the following transactions in June. (Theterms of all credit sales are 2/15, n/30, and all sales arerecorded at the gross price.)
June | 4 | Sold$700 of merchandise (that had cost $350) on credit to AnneCianci. |
5 | Sold$7,200 of merchandise (that had cost $3,600) to customers who usedtheir Zisa cards. | |
6 | Sold$5,782 of merchandise (that had cost $2,891) to customers who usedtheir Access cards. | |
8 | Sold$4,870 of merchandise (that had cost $2,435) to customers who usedtheir Access cards. | |
10 | Submitted Access card receipts accumulated sinceJune 6 to the credit card company for payment. | |
13 | Wrote off the account of Nakia Wells against theAllowance for Doubtful Accounts. The $509 balance in Wells%u2019saccount stemmed from a credit sale in October of last year. | |
17 | Received the amount due from Access. | |
18 | Received Cianci%u2019s check in full payment for the purchase ofJune 4. |
Required: |
Prepare journal entries to record the precedingtransactions and events. (The company uses the perpetual inventorysystem. |