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13 June, 11:18

Woodstock Co. had $500 of credit cards sales. The net cash receipts were deposited immediately into Woodstock's bank account less a 2% fee. The entry to record this sales transaction would include a credit to:

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  1. 13 June, 14:26
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    Sales revenue for $500

    Explanation:

    The journal entry is shown below:

    Account receivable Dr $490

    Credit card expense Dr $10

    To Sales revenue $500

    (Being the sale transaction is recorded)

    The account receivable is computed below:

    = Sales revenue - sales revenue * fee percentage given

    = $500 - $500 * 2%

    = $500 - $10

    = $490

    And, the credit card expense is

    = Sales revenue * fee percentage given

    = $500 * 2%

    = $10
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