Problem $7\mathrm{.}6$A $($Algo$)$ Recording sales made for cash, on open account, and with credit cards. LO $7-1,7-2,7-4$

Royal Gift Shop sells cards, supplies, and various holiday greeting cards. Sales to retail customers are subject to an $8$ percent sales tax. The firm sells its merchandise for cash; to customers using bank credit cards, such as MasterCard and Visa; and to customers using American Express. The bank credit cards charge a $2$ percent fee. American Express charges a $3$ percent fee. Royal Gift Shop also grants trade discounts to certain wholesale customers who place large orders. These orders are not subject to sales tax. During February $20$X$1,$ Royal Gift Shop engaged in the following transactions:

DATE TRANSACTIONS

$20$X$1$

Feb. $1$ Sold crystal goods to Lovely Kitchens, a wholesale customer. The list price is $$4,200,$ with a $20$ percent trade discount. This sale is not subject to sales tax. Issued Invoice $5950$ with terms of n$/15.$

$15$ Recorded cash sales for the period from February $1$ to February $15$ of $$8,700$ plus sales tax of $$696.$

$15$ Recorded sales for the period from February $1$ to February $15$ to customers using bank credit cards of $$12,200$ plus sales tax of $$976.($Record the $2$ percent credit card expense at this time.$)$

$16$ Received a check from Lovely Kitchens in payment of Invoice $5950$ dated February $1.$

$16$ Sold merchandise to customers using American Express for $$8,200$ plus sales tax of $$656.$

$17$ Sold a set of Roman statues to Beautiful Bedrooms, a wholesale customer. The list price is $$8,200,$ with a $25$ percent trade discount. This sale is not subject to sales tax. Issued Invoice $5951$ with terms of n$/15.$

$20$ Received payment from American Express for the amount billed on February $16,$ less a $3$ percent credit card expense.

$27$ Received a check from Beautiful Bedrooms in payment of Invoice $5951$ dated February $17.$

$28$ Recorded cash sales for the period from February $16$ to February $28$ of $$7,350$ plus sales tax of $$588.$

$28$ Recorded sales for the period from February $16$ to February $28$ to customers using bank credit cards of $$20,000$ plus sales tax of $$1,600.($Record the $2$ percent credit card expense at this time.$)$

$28$ Sold merchandise to customers using American Express for $$9,400$ plus sales tax of $$752.$

Required:

Record the transactions in a general journal.

Post the entries from the general journal to the appropriate accounts in the general ledger.

GENERAL LEDGER ACCOUNTS

$101$ Cash, $$22,430$ Dr$.401$ Sales

$121$ Accounts Receivable $521$ Credit Card Expense

$222$ Sales Tax Payable

Analyze:

What was the total credit card expense incurred in February?