Target allows customers to use MasterCard.They report sales of $24,000 for the week.MasterCard charges Target a 3% fee.The journal entry for this transaction would be:
A) $$\begin{array} { | l | r | r | r | }
\hline \text { Sales } & & 24,000 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Cash } & & 24,720 \
\hline
\end{array}$$
B) $$\begin{array} { | l | r | r | r | }
\hline \text { Cash } & & 24,000 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Sales } & & 24,720 \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | r | }
\hline \text { Cash } & & 23,280 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Sales } & & 24,000 \
\hline
\end{array}$$
D) None of the above.

Question

Target allows customers to use MasterCard.They report sales of $24,000 for the week.MasterCard charges Target a 3% fee.The journal entry for this transaction would be:
A) $$\begin{array} { | l | r | r | r | } 
\hline \text { Sales } & & 24,000 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Cash } & & 24,720 \
\hline
\end{array}$$
B) $$\begin{array} { | l | r | r | r | } 
\hline \text { Cash } & & 24,000 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Sales } & & 24,720 \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | r | } 
\hline \text { Cash } & & 23,280 & \
\hline \text { Bankcard discount expense } & & 720 & \
\hline & \text { Sales } & & 24,000 \
\hline
\end{array}$$
D) None of the above.

Quizplus · Accepted Answer

The correct journal entry for this transaction reflects the sales amount ($24,000), the bankcard discount expense (3% of $24,000 = $720), and the cash received after the fee ($24,000 - $720 = $23,280). This is accurately represented in option C.

Target Allows Customers to Use MasterCard B) C) D) None of the Above