Question #2 Apply control activities to cash receipts and cash payments (6 marks)

Carfox Auto Parts allows customers to pay for merchandise with cash, debit cards, bank credit cards, or a Carfox credit card. The bank charges Carfox $1.00 for each debit card sale and a 4% fee for bank credit card sales. On September 25 a customer makes a $1,200 purchase from Carfox using her debit card.

Required:

a) Prepare Carfoxs journal entry to record this transaction.

b) Assume instead the customer pays for her purchase using her MasterCard. Record the transaction.

c) Assume instead the customer uses her Carfox store credit card. Record the transaction.