Stelloh's Berry Farm accepted a bank-issued credit card in payment of a $1,200 sales transaction.Stelloh's bank charges 1% to process the transaction.The journal entry to record the sales transaction will include:

Question

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The journal entry would include a debit to Cash for $1,188 (the amount received from the credit card), a debit to Credit Card Discount Expense for $12 (1% processing fee), and a credit to Sales Revenue for $1,200 (the amount of the sale). This reflects the actual cash received by the company and the processing fee charged by the bank. There is no need to include an Accounts Receivable account since the payment was received in cash.

Stelloh's Berry Farm Accepted a Bank-Issued Credit Card in Payment