Question

Barnes Co. sold $4,000 of equipment on credit to a customer last month (this was recorded last month in the accounts). Barnes has just received a check from the customer for $2,000 as half payment on the account. Which of the following would be part of the journal entry Barnes should record upon the receipt of this payment?

a. Debit to Accounts Payable for $2,000
b. Credit to Cash for $2,000
c. Credit to Accounts Payable for $2,000
d. Credit to Accounts Receivable for $2,000

Answer 1

Barnes should record a Credit to Accounts Receivable and a Debit to Cash for $2,000 upon receipt of the payment.

Step-by-step explanation:

The journal entry Barnes should record upon the receipt of the $2,000 payment from the customer would be:

Credit to Accounts Receivable for $2,000

Debit to Cash for $2,000

This entry reflects the reduction in the Accounts Receivable balance, as the customer has made a payment on the outstanding amount. The Cash account is debited to show the increase in cash received from the customer.