Simonic Retailers accepted $80,000 of Citibank Visa credit card charges for merchandise sold on July 1.Citibank charges 4% for its credit card use.The entry to record this transaction by Simonic Retailers will include a credit to Sales Revenue of $80,000 and a debit to (or debits to)
A)Cash $76,800 and Service Charge Expense $3,200.
B)Accounts Receivable $76,800 and Service Charge Expense $3,200.
C)Cash $76,800 and Interest Expense $3,200.
D)Accounts Receivable $80,000.

Question

Quizplus · Accepted Answer

Simonic Retailers will receive cash of $76,800 after Citibank's 4% service charge ($80,000 x 4% = $3,200). Therefore, the entry will debit Cash for $76,800 and Service Charge Expense for $3,200.

Simonic Retailers Accepted $80,000 of Citibank Visa Credit Card Charges