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Consider the following transaction: On March 6, Fun Cards sells 540 card decks with a sales price of $7 per deck to Padma Singh. The cost to Fun Cards is $4 per deck. Prepare a journal entry under each of the following conditions. Assume MoneyPlus charges a 2% fee for each sales transaction using its card. A. Payment is made using a credit, in-house account. B. Payment is made using a MoneyPlus credit card.

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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Section
FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 3EA
Textbook Problem
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Consider the following transaction: On March 6, Fun Cards sells 540 card decks with a sales price of $7 per deck to Padma Singh. The cost to Fun Cards is $4 per deck. Prepare a journal entry under each of the following conditions. Assume MoneyPlus charges a 2% fee for each sales transaction using its card.

A. Payment is made using a credit, in-house account.

B. Payment is made using a MoneyPlus credit card.

To determine

Concept introduction:

Journal Entry: In journal Entry Company record all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To prepare:

Journal entries.

Explanation of Solution

A. Cards sold $7 per deck and 540 decks sold in the market if amount 3780 (540×7). So bank account is debited by the 3780 because amount received through account and sales account is credited by 3780. In second entry company transfer the amount in the cost of goods sold from inventory so cost o...

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Chapter 9 Solutions

Principles of Accounting Volume 1
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