Kobe Company provided consulting service to a client on January 1, and billed them for $15,000. On February 1, the client made cash payment of $8,000 and signed a note for $7,000 to settle the account.
What is Kobe Company's journal entry on February 1?
A) Cash 8,000
Accounts Receivable 7,000
Notes Receivable 15,000
B) Accounts Payable 15,000
Notes Payable 7,000
Cash 8,000
C) Cash 8,000
Notes Receivable 7,000
Consulting Revenue 15,000
D) Cash 8,000
Notes Receivable 7,000
Accounts Receivable 15,000

Question

Quizplus · Accepted Answer

The correct journal entry reflects receiving cash of $8,000, converting $7,000 of the accounts receivable into a note receivable, and reducing the accounts receivable by the total amount owed of $15,000.

Kobe Company Provided Consulting Service to a Client on January