On the last day of the month,a company receives $24,000 of cash from customers.Of that amount,$3,000 was for services performed and $21,000 represented payments on account.The journal entry to record the $24,000 cash receipt would include a debit to:
A)Accounts Receivable for $21,000,a debit to Service Revenue for $3,000,and a credit for $24,000 to Cash.
B)Cash for $24,000,a credit to Accounts Receivable for $21,000,and a credit to Service Revenue for $3,000.
C)Accounts Receivable for $21,000,a debit to Deferred Revenue for $3,000,and a credit to Cash for $24,000.
D)Cash for $24,000,a debit to Service Revenue for $3,000,and a credit to Accounts Receivable for $21,000.

Question

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The revenue was recognized when the services were performed and the right to collect the $21,000 from customers was recorded as an increase to an asset called Accounts Receivable.A compound journal entry is required for this situation.It includes a debit to Cash for $24,000 (the amount collected),a credit to Accounts Receivable for $21,000 (the amount collected on account),and a credit to Service Revenue for $3,000 (the amount of services performed).

On the Last Day of the Month,a Company Receives $24,000