Essay. Write your answer in the space provided or on a separate sheet of paper.

Prairie Outfitters, Inc., a retailer, accepts payment through credit cards. During August, credit card sales amounted to $12,000. The processor charges a 3% fee. Assuming that the credit card processor uses the gross method, prepare the journal entries, on the books of Prairie Outfitters, for the credit card sales and the payment of fee. (Ignore cost of goods sold.)