Question

As of December 31, customers owe us $15,000 for landscaping services we completed in December, but they won't pay until January 3. At January 3 we received $15,000. Give the adjusting entry to account for the amounts earned as of December 31.

Answer 1

To account for the amounts earned as of December 31, the adjusting entry is to debit Accounts Receivable by $15,000 and credit Income by $15,000.

Step-by-step explanation:

The adjusting entry to account for the amounts earned as of December 31 when customers owe us $15,000 for landscaping services completed in December but won't pay until January 3 is as follows:

1. Debit Accounts Receivable by $15,000
2. Credit Income by $15,000

This entry reflects the revenue earned for the services provided, even though the cash is not yet received.