| Boone Company accepted credit-card payments of $6,000 for services rendered to its customers. The credit-card company charges Boone Company a 4% fee for handling the transactions. Which of the following is the correct journal entry to record these credit-cardtransactions? |
| Debit | Credit | |
| Accounts Receivable—Credit Card Co. | 5,760 | |
| Service Revenue | 5,760 |
| Debit | Credit | |
| Cash | 5,760 | |
| Service Revenue | 5,760 |
| Debit | Credit | |
| Accounts Receivable—Credit Card Co. | 5,760 | |
| Credit Card Expense | 240 | |
| Service Revenue | 6,000 |
| Debit | Credit | |
| Accounts Receivable—Credit Card Co. | 6,000 | |
| Credit Card Expense | 240 | |
| Service Revenue | 5,760 |
Description
Debit
Credit
Accounts Receivable—Credit Card Co.
5,760
Credit Card Expense
240
Service Revenue
6,000
Explanation
6000 is the revenue for the company so it is credited
Less 40% of service charges
So 4% *6000 =240
Accounts Receivable = 6000-240
=5760
