Brinker accepts all major bank credit cards, including First Savings Bank's, which assesses a 2.5% charge on sales for using its card. On May 26, Brinker had $4,800 in First Savings Bank Card credit sales. What entry should Brinker make on May 26 to record the deposit?

Question

Quizplus · Accepted Answer

- Brinker had $4,800 in credit sales using First Savings Bank's credit card, which assesses a 2.5% charge on sales. 
- The 2.5% charge amounts to $120 (2.5% of $4,800). 
- Therefore, Brinker would receive only $4,680 ($4,800 - $120) as the net amount from this transaction. 
- We need to record this transaction in the books of Brinker. 
- The entry should debit the amount received ($4,680) and the credit card expense ($120) and credit the total sales ($4,800). 
- Therefore, the correct journal entry would be: 
Debit Cash $4,680; Debit Credit Card Expense $120; Credit Sales $4,800.

Brinker Accepts All Major Bank Credit Cards, Including First Savings