Using the information provided in BE4-4, assume now that Cal’s customer pays off the balance owed of $ 120,000 in full on June 23, 2015. What is the effect of this transaction on the accounting equation? What is the journal entry for this transaction?
In BE4-4
Cal’s Computer Servicing, Inc., a service company that provides installation services for computer programs, had a service revenue transaction in the amount of $ 120,000 on May 31, 2015, with one customer. This customer chose to put the balance owed on its credit account with Cal’s, and it will pay off the balance in the following month. What is the effect of the revenue transaction on the accounting equation? What is the journal entry for this transaction?