Question

On May 7, Juanita Construction provides services on account to Michael Wolfe for $4,000. Michael pays for those services on May 13. Required: For Juanita Construction, record the service on account on May 7 and the collection of cash on May 13.

Answer 1

Explanation:

May 7

Credit sales of $4,000 which means accounts receivable will increase by $4,000 and Sales revenue will also raise b y the same amount

May 13

Collection on account of May 7th sales which means the account receivable will go down by $4,000 and cash will increase by $4,000

Journal entries

DATE                                     Particulars                                             Amount

May 7th                    Account receivable (+A) Dr.                                $4,000

                                                to Sales revenue (+Equity)                  $4,000

                                        ( To record the credit sales)

May 13th                 Cash (+A)  Dr.                                                         $4,000

                                                 to Accounts receivable(-A)                 $4,000

                                  (To record the receipt of cash)