MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card.Regional Bank deducts a 4% service charge for sales on its credit cards.MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days.The journal entry to record this sale transaction would be:

Question

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Regional Bank deducts a 4% service charge for sales on its credit cards, so the amount received by MacKenzie is $180 - (4% x $180) = $172.80. Therefore, the Accounts Receivable amount is $172.80. The $7.20 service fee is recorded as Credit Card Expense. The Sales amount is still $180. The journal entry is Debit Accounts Receivable-Regional $172.80;debit Credit Card Expense $7.20 and credit Sales $180.

MacKenzie Company Sold $180 of Merchandise to a Customer Who