Ask Question
3 August, 01:10

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. 3 August, 03:07
    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?
Get 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 there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers