||(L.O. 4) This exercise will illustrate the journal entries related to credit card sales.
Bubba's Bed & Bath Shop accepts MasterCard, VISA, and its own Bubba's Bed & Bath Shop (BB&BS) credit cards. MasterCard and VISA sales slips are deposited in the bank daily; the bank charges a 3% fee. The following transactions occurred on May 3, 2014.
- Made sales of $7,200 to customers who presented MasterCard and VISA cards.
- Made sales to the following who used their BB&BS cards:
- Nadine Adam, $120
- Connie Dawson, $240
- Dale Bandy, $500
- Prepare the journal entries to record the transactions above for Bubba's Bed and Bath Shop.
- Prepare the journal entry to record collections of $120, $40, and $100 from Nadine Adam, Connie Dawson, and Dale Bandy, respectively.
- Prepare the journal entry to record interest charged to customer accounts at the rate of 1.5% per month as follows: Connie Dawson, $3; Dale Bandy, $6.