Q5TI - Horngren'S Financial And Managerial Accounting

Question

Phoenix Restaurants accepts credit and debit cards as forms of payment. Assume Phoenix had $12,000 of credit and debit card

sales on June 30, 2017.

9. Suppose Phoenix’s processor charges a 2% fee and deposits sales net of the fee. Journalize the sale transaction for the

restaurant.

10. Suppose Phoenix’s processor charges a 2% fee and deposits sales using the gross method. Journalize the sale transaction for

the restaurant.

Step-by-Step Solution

Answer

The cash account is debited with $12,000 and the sales account is credited with $12,000.

Step 1: Definition of credit card

Credit card is a special type of the card that facilitates customers to purchase on credit.

Step 2: Journal entries

Date	Particulars	Debit	Credit
June 30, 2017	Cash	$11,760
	Credit Card Expense	$240
	Sales		$12,000
	(Being entry to record sale on credit card)
June 30, 2017	Cash	$12,000
	Sales		$12,000
	(To record the sales receipt)
June 30, 2017	Credit Card Expense	$240
	Cash		$240
	(Entry for the payment of credit card expense)