Question

On Saturday, December 31, the company's owner provided ten hours of service to a customer. The company bills $100 per hour for services provided on weekends. Payment has not yet been received. The owner did not stop in the office on Saturday; as such, on December 31, the services were unbilled and unrecorded. Complete the necessary adjusting entry by selecting the account names and dollar amounts from the drop-down menus.

Answer 1

Answer:

Adjusting Entry

December 31, 2019:

Debit Accounts receivable $1,000

Credit Service Revenue $1,000

To record the provision of service to a customer for 10 hours by the owner.

Explanation:

a) Data and Analysis:

Accounts receivable $1,000 Service Revenue $1,000 ($100 * 10 hours)

b) The above transaction shows that service was rendered on account.  This implies that the Accounts receivable will be debited while the Service revenue is credited with $1,000 respectively since payment has not yet been received by the company as at the adjustment date of December 31, 2019.