On December 31, Adam Company received a statement from its book distributor notifying Adam that the company had earned $50,000 for its December royalties. This amount will be paid to Adam next year in February. Because December 31 is the end of Adams fiscal year, the company makes adjusting entries at that time. Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 to record the royalty revenue that Adam has earned but not yet received?

CREDIT to Royalty Revenue

DEBIT to Royalty Revenue

CREDIT to Accounts Payable

CREDIT to Accounts Receivable

DEBIT to Accounts Payable