Question

At the end of the previous year, a customer owed Days Company $400. On February 1 of the current year, the customer paid $600 total, which included the $400 owed plus $200 owed through February 1st. The journal entry on February 1 is

Answer 1

The journal entry on February 1 for Days Company is as follows:

Journal Entry:

February 1:

Debit Cash $600

Credit Accounts Receivable $600

• To record the receipt of payment on account.

Transaction Analysis:

February 1: Cash $600 Accounts Receivable $600

Thus, the journal entry on February 1 will increase Cash by $600 and reduce Accounts Receivable by $600.

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