A company provides maintenance services to customers. The company's policy is to provide services and then bill customers on the 10th of the following month. In December 2021, the company provided services of $14,000 and plans to bill customers on January 10, 2022. What adjusting entry, if any, will the company record on December 31, 2021? Debit Accounts Receivable and credit Deferred Revenue for $14,000. Debit Accounts Receivable and credit Service Revenue for $14,000. No adjusting entry is necessary at the end of the year. Debit Service Revenue and credit Accounts Receivable for $14,000.

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Business

Kobe Ayala

5 October, 17:16

A company provides maintenance services to customers. The company's policy is to provide services and then bill customers on the 10th of the following month. In December 2021, the company provided services of $14,000 and plans to bill customers on January 10, 2022. What adjusting entry, if any, will the company record on December 31, 2021? Debit Accounts Receivable and credit Deferred Revenue for $14,000. Debit Accounts Receivable and credit Service Revenue for $14,000. No adjusting entry is necessary at the end of the year. Debit Service Revenue and credit Accounts Receivable for $14,000.

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Abagail · Answer 1

Debit Accounts Receivable and credit Service Revenue for $14,000.

Explanation:

The adjusting entry is as follows:

On December 31, 2021

Account receivable A/c Dr $14,000

To Service revenue $14,000

(Being the goods are sold on credit)

Basically we debited the account receivable and credited the service revenue. Both the accounts are recorded for $14,000

No other entry is passed.