Presented below are two independent transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Bridgeport Restaurant accepted a Visa card in payment of a $300 lunch bill. The bank charges a 2% fee. What entry should Bridgeport make? (b) Sarasota Company sold its accounts receivable of $76,000. What entry should Sarasota make, given a service charge of 2% on the amount of receivables sold?

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Business

Jonah Shah

2 June, 18:14

Presented below are two independent transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Bridgeport Restaurant accepted a Visa card in payment of a $300 lunch bill. The bank charges a 2% fee. What entry should Bridgeport make? (b) Sarasota Company sold its accounts receivable of $76,000. What entry should Sarasota make, given a service charge of 2% on the amount of receivables sold?

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Burns · Answer 1

Journal Entry : The journal entry is a recording of transactions which have two sides i. e. debit side and credit side. Debit side records all expenditures and losses, whereas credit side records income and gains.

(a) The entry which Bridgeport should make is shown below:

Cash A/c Dr $294

Bank charge expense Dr ($300 * 2%) = 6

To Sales Revenue $300

(b) The entry which Sarasota should make, given a service charge of 2% on the amount of receivables sold is shown below:

Cash A/c Dr $74,480

Bank charge expense Dr ($76,000 * 2%) = $1,520

To Accounts Receivable $76,000