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 the collection from the credit card company would be:
A)Debit Cash of $172.80 and credit Accounts Receivable-Regional $172.80.
B)Debit Cash of $180;credit Credit Card Expense $7.20 and credit Accounts Receivable $172.80.
C)Debit Accounts Receivable-Regional $172.80;debit Credit Card Expense $7.20 and credit Sales $180.
D)Debit Cash $172.80;debit Credit Card Expense $7.20 and credit Sales $180.
E)Debit Cash $172.80 and credit Sales $172.80.

Question

Quizplus · Accepted Answer

The collection from the credit card company would be recorded by debiting Cash for the net amount received ($180 - 4% of $180 = $172.80) and crediting Accounts Receivable-Regional for the same amount, reflecting the reduction in the receivable from the credit card company.

MacKenzie Company Sold $180 of Merchandise to a Customer Who