Kobe Company provided consulting service to a client on January 1, and billed them for $15,000. On February 1, the client made cash payment of $8,000 and signed a note for $7,000 to settle the account.
What is Kobe Company's entry on February 1?
A) Increase Cash 8,000; Increase Accounts Receivable 7,000; decrease Notes Receivable 15,000
B) Decrease Accounts Payable 15,000; increase Notes Payable 7,000; decrease Cash 8,000
C) Increase Cash 8,000; increase Notes Receivable 7,000; increase Consulting Revenue 15,000
D) Increase Cash 8,000; increase Notes Receivable 7,000; decrease Accounts Receivable 15,000

Question

Quizplus · Accepted Answer

On February 1, Kobe Company receives $8,000 in cash and a note for $7,000, settling a $15,000 accounts receivable. This means cash increases by $8,000, a note receivable is created for $7,000, and the accounts receivable decreases by $15,000, reflecting the payment and note agreement.

Kobe Company Provided Consulting Service to a Client on January