Agatha Panthis Landscape Architect Company earned $2,500 of revenue collecting $1,000 immediately and will correct the remaining amount in 30 days. The journal entry to record this transaction is:
A)Debit Fees Income $2,500; Credit Cash $1,000; credit Accounts Receivable $1,500
B)Debit Cash $1,000; Debit Accounts Receivable $1,500; Credit Fees Income $2,500
C)Debit Fees Income $2,500; Credit Accounts Receivable $2,500
D)Debit Cash $1,000; Credit Fees Income $1,000

Question

Quizplus · Accepted Answer

The correct journal entry to record the transaction involves debiting Cash for the amount received immediately ($1,000) and debiting Accounts Receivable for the amount to be collected later ($1,500), totaling the revenue earned of $2,500, which is credited to Fees Income. This reflects the increase in assets (Cash and Accounts Receivable) and the recognition of earned income.

Agatha Panthis Landscape Architect Company Earned $2,500 of Revenue Collecting