Zane Enterprises accepts a credit card as payment for $1,000 of services provided to a customer. The credit card company charges a 4% handling charge for collection services. Based on this information, Multiple Choice Zane will pay the credit card company $960 cash. Zane will pay the credit card company $1,000 cash. Zane will collect $1,000 cash from the credit card company. Zane will collect $960 cash from the credit card company.
Added by Chelsea Z.
Close
Step 1
The credit card company charges a 4\% handling charge on \$1000. Handling charge = 4\% of \$1000 = 0.04 \times 1000 = \$40 Show more…
Show all steps
Your feedback will help us improve your experience
Brooke Bussoletti and 53 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Westover Company accepts a credit card as payment for $1,000 of services provided to a customer. The credit card company charges a 4% handling charge for its collection services. Select the journal entry that shows how collecting the account receivable from the credit card company would be recorded. Account Titles Debit Credit Cash 960 Accounts Receivable – Credit Card Company 960 Account Titles Debit Credit Cash 1,000 Accounts Receivable – Credit Card Company 1,000 Account Titles Debit Credit Accounts Receivable – Credit Card Company 960 Cash 960 Account Titles Debit Credit Accounts Receivable – Credit Card Company 1,000 Cash 1,000
Brooke B.
Andrew N.
Knowledge Check 01 Messing Company has an agreement with a third-party credit card company, which calls for cash to be received immediately upon deposit of customers' credit card sales receipts. The credit card company receives 3.5 percent of card sales as its fee. Messing has $4,000 in credit card sales on January 1. Prepare the January 1 journal entry for Messing Company by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Jennifer S.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD