Levine company uses the perpetual inventory system. apr. 8 sold merchandise for $8,400 (that had cost $6,000) and accepted the customer’s suntrust bank card. suntrust charges a 4% fee. 12 sold merchandise for $5,600 (that had cost $3,500) and accepted the customer’s continental card. continental charges a 2.5% fee. prepare journal entries to record the above credit card transactions of levine company.

The journal entries are in the explanation.

Explanation:

8 - Sold merchandise and accepted the customer’s Suntrust Bank Card.

(Debit) Cash           8,064 (8,400 X 0.96= 8,064)

(Debit) Credit card expense       336 (8,400 X 0.04=336)

(Credit) Sales           8,400

(Debit) Costs of goods sold        6,000

(Credit) Merchandise inventory            6,000

12 - Sold merchandise and accepted the customer’s Continental Card.

(Debit) Cash            5,460 (5,600 X 0.975=5,460 )

(Debit) Credit card expense           140 (5,600 X 0.025=140)

(Credit) Sales                          5,600

(Debit) Costs of goods sold              3,500

(Credit) Merchandise inventory                   3,500

                               Skysong Corporation

                       Statement of Retained Earnings

Retained earnings balance January 1, 2020               $691,300

Add:

Adjustments to 2019 Income Statement                       $88,390

Net profits 2020                                                          $1,552,100

Less:

Dividends declared and distributed                            ($82,000)

Retained earnings balance December 31, 2020      $2,249,790

Since the land purchase was recorded as maintenance expense by error, the 2019 income statement must be adjusted by adding that amount.