Knowee
Questions
Features
Study Tools

T. Hillcrest Co. sold $500 of merchandise on a bank credit card with a 5% fee. The entry to record this sales transaction would include debit(s) to:Multiple choice question.Sales for $500Cash for $500 and Credit Card Expense for $25Cash for $475 and to Credit Card Expense for $25Accounts Receivable for $500

Question

T. Hillcrest Co. sold 500ofmerchandiseonabankcreditcardwitha5500 of merchandise on a bank credit card with a 5% fee. The entry to record this sales transaction would include debit(s) to:Multiple choice question.Sales for 500Cash for 500andCreditCardExpensefor500 and Credit Card Expense for 25Cash for 475andtoCreditCardExpensefor475 and to Credit Card Expense for 25Accounts Receivable for $500

🧐 Not the exact question you are looking for?Go ask a question

Solution

The correct answer is: Cash for 475andtoCreditCardExpensefor475 and to Credit Card Expense for 25.

Here's the step by step explanation:

  1. T. Hillcrest Co. sold merchandise worth $500. This is the total sales amount before any fees.

  2. The bank credit card company charges a 5% fee. To calculate this, multiply 500by5500 by 5% (or 0.05), which equals 25. This is the credit card expense.

  3. The company will receive the sales amount minus the credit card fee. To calculate this, subtract 25from25 from 500, which equals $475. This is the amount that will be debited to the Cash account.

  4. Therefore, the journal entry to record this transaction would include a debit to Cash for 475(theamountreceivedafterthecreditcardfee)andadebittoCreditCardExpensefor475 (the amount received after the credit card fee) and a debit to Credit Card Expense for 25 (the fee charged by the credit card company).

This problem has been solved

Similar Questions

Thomas Co. sold $1,000 worth of merchandise on a bank credit card with a 3% fee. The entry to record the sales transaction would include a debit to Cash in the amount of $.

The entry to record a sale of $750 (cost of goods $400) with terms of 2/10, n/30 will include a: Group of answer choices debit to Discount Allowed for $15. debit to Sales Revenue for $735. credit to Accounts Receivable for $750. credit to Sales Revenue for $750.

Select all that applyJD Co. had $1,000 of credit cards sales. The net cash receipts were deposited immediately into JD Company's bank account less a 3% fee. The entry to record this sales transaction would include the following debit entries.Multiple select question.Sales for $970Cash for $1,000Cash for $970Accounts Receivable for $970Credit Card Expense for $30Accounts Receivable for $1,000

P. Jameson Co. sold $500 of merchandise on Master Card credit sales. The net cash receipts from the sale are immediately deposited in the seller's bank account. Master Card charges a 4% fee. The journal entry to record this sales transaction would include a:Multiple select question.Credit to Credit Card Expense for $20.Credit to Sales for $500.Debit to Cash for $485.Credit to Accounts Receivable for $500.Debit to Cash for $480.Debit to Credit Card Expense for $20.

MacKenzie Company sold $500 of merchandise to a customer who used a Regional Bank credit card. Regional Bank charges a 2.5% fee for sales on its credit cards. The journal entry to record this sales transaction would be:Multiple ChoiceDebit Cash of $500 and credit Sales $500.Debit Cash $487.50 and credit Sales $487.50.Debit Cash of $500 and credit Accounts Receivable $500.Debit Accounts Receivable $500 and credit Sales $500.Debit Cash $487.50; debit Credit Card Expense $12.50 and credit Sales $500.

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.