Question 6

Tenisa and a colleague have successfully brought in a new client for the decorating business. The first order from the new client is placed on September 15, for a party that takes place October 2-4. The client agrees to pay $1,500 for Comfy Homes decorating services, and pays a deposit of $500 on the date of the order. The remaining balance is billed to the client when the event is complete, and due within 15 days from billing. What is the journal entry that should be recorded on October 5, once Comfy Home has provided the decorating services and issued the invoice to the client?

A. Debit Cash for $500, Debit Accounts Receivable for $1,000, and Credit Revenue for $1,500

B. Debit Accounts Receivable for $1,000 and Credit Unearned Revenue for $1,000

C. Debit Accounts Receivable for $1,000, Debit Deferred Revenue for $500, and Credit Revenue for $1,500

D. Debit Accounts Receivable for $1,000, Debit Prepaid Expenses for $500, and Credit Revenue for $1,500