Question

On Jan. 2, Callie Company performed $800 worth of services for a client. The client paid $100 immediately, but promised to pay the balance next month. The journal entry to record this transaction in Callie Company's books would include a _____ to the Cash account; a _____ to the Accounts receivable account and a _____ to the Service revenue account

Answer 1

The transaction should be recorded with a debit to both Cash and Accounts Receivable and a credit to Service Revenue, reflecting the partial payment and recognition of revenue.

Step-by-step explanation:

The journal entry to record the transaction in Callie Company's books would include a debit to the Cash account for $100, a debit to the Accounts Receivable account for the remaining $700, and a credit to the Service Revenue account for $800. This transaction reflects an immediate cash payment and the client's promise to pay the balance later, which is recognized as revenue by Callie Company at the time the services are performed.

The journal entry to record this transaction in Callie Company's books would include a debit to the Cash account because cash is being received, a debit to the Accounts receivable account for the remaining balance of $700 that is owed by the client, and a credit to the Service revenue account to record the revenue earned from providing the services.