Exercise 9-1 Accounting for credit card sales L.O. C1
Petri Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Omni Bank Card, Petri receives an immediate credit to its account when it deposits sales receipts. Omni assesses a 4% service charge for credit card sales. The second credit card that Petri accepts is the Continental Card. Petri sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its card.
Sold merchandise for $9,500 (that had cost $7,021) and accepted the customer's Omni Bank Card. The Omni receipts are immediately deposited in Petri's bank account.
Sold merchandise for $4,100 (that had cost $2,657) and accepted the customer's Continental Card. Transferred $4,100 of credit card receipts to Continental, requesting payment.
Received Continental's check for the April 12 billing, less the service charge.
Prepare journal entries to record the above selected credit card transactions of Petri Company. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Date General Journal Debit Credit
Apr. 8 Cash correct correct
Credit card expense correct correct
Sales correct 9,500 correct
Cost of goods sold correct 7,021 correct
Merchandise inventory correct 7,021 correct
12 Accounts receivable-Continental bank correct incorrect
Credit card expense correct incorrect
Sales correct 4,100 correct
Cost of goods sold correct 2,657 correct
Merchandise inventory correct 2,657 correct
20 Cash correct 4,100 incorrect
Accounts receivable-Continental bank correct 4,100 incorrect
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