Question: Credit card sales for Tent Rent a party rental company

Credit card sales for Tent Rent, a party rental company, are given for a one-week period in July. All payments from the credit card company are directly deposited into Tent Rent’s bank account less a service fee. There is often a delay in processing the credit card company receipts, so Tent Rent uses an Account Receivable—Credit Card account to record all sales on credit cards. When payments are received, this account receivable is reduced.
(a) Record the July 6th sales entry.
(b) Record the July13th entry for the three receipts from the credit card company.
(c) What percent fee does the credit card company charge?
(d) What are the benefits and costs to Tent Rent for accepting third-party (national) credit cards?
(e) What would be the benefits and costs to Tent Rent if it were offer in-house credit cards instead rather than accepting third-party cards?

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  • CreatedMarch 27, 2015
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