Question

maple woodworking accepts credit cards at its store. maples credit card processor charges a fee of 2% of the total amount of any credit sale. assume that ralph stone purchases $9,000 of custom furniture and pays with a visa card. make the entry that maple would make to record the sale to stone. (you do not need to make the cost of goods sold entry in this exercise.) (record debits first, then credits. exclude explanations from any journal entries. assume that since this is a custom order, no refunds or returns are allowed.)

Explanation:

Step1: Calculate the credit card fee

The credit card fee is \(2\%\) of the sale amount. The sale amount is \(\$9,000\). So the fee \(= 9000\times0.02=\$180\)

Step2: Calculate the amount received from the credit - card processor

The amount received \(=\) Sale amount - Credit card fee. So \(9000 - 180=\$8820\)

Step3: Record the journal entry

The journal entry to record the credit - card sale:

• Debit: Cash (amount received from processor) \(\$8820\)
• Debit: Credit Card Expense (fee charged by processor) \(\$180\)
• Credit: Sales Revenue (total sale amount) \(\$9000\)

Answer:

Accounts	Debit	Credit
Credit Card Expense	180
Sales Revenue		9000