Hankco accepts all major bank credit cards, including Omni Bank’s, which assesses a 3% charge on sales for using its card. On June 28, Hankco had $3,600 in Omni Card credit sales. What entry should Ha

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04.07.2022 - 19:20

Hankco accepts all major bank credit cards, including Omni Bank’s, which assesses a 3% charge on sales for using its card. On June 28, Hankco had $3,600 in Omni Card credit sales. What entry should Ha

Question:

Hankco accepts all major bank credit cards, including Omni Bank’s, which assesses a 3% charge on sales for using its card. On June 28, Hankco had $3,600 in Omni Card credit sales. What entry should Hankco make on June 28 to record the deposit?

– Debit Accounts Receivable $3,600; credit Sales $3,600.

– Debit Accounts Receivable $3,492; debit Credit Card Expense $108; credit Sales $3,600.

– Debit Cash $3,708; credit Credit Card Expense $108; credit Sales $3,600.

– Debit Cash $3,600; credit Sales $3,600.

– Debit Cash $3,492; debit Credit Card Expense $108; credit Sales $3,600.

Answers (1)

Dena April 7, 2023 в 14:45

The correct answer is: Debit Cash $3,492; debit Credit Card Expense $108; credit Sales $3,600. This is because Hankco has made sales using Omni Bank's credit card, which assesses a 3% charge on sales. This means that the company will receive $3,600 from the sale, but will also incur a credit card expense of 3% of the sale amount, which is $108. Therefore, the entry should reflect the decrease in Accounts Receivable (since the sale has been made), the increase in Cash (since the company has received payment), and the increase in Credit Card Expense (since the company has incurred a fee for using Omni Bank's credit card). The Sales account should be credited for the amount of the sale, which is $3,600.

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