Krenshaw Rentals Use the Five Transactions for Krenshaw Rentals Described Below to Below

question 14

Multiple Choice

Krenshaw Rentals
Use the five transactions for Krenshaw Rentals described below to answer the questions that follows.
Oct 1 Krenshaw purchases two new saws on credit at $375 each. The saws are added to
Krenshaw's rental inventory. Payment is due in 30 days.
8 Krenshaw accepts advance deposits for tool rentals of $75.
15 Krenshaw receives a bill from Farmer's Electric Company for $150. Payment is due
in 30 days.
20 Customers are charged $750 by Krenshaw for tool rentals. Payment is due from the customers in 30 days.
31 Krenshaw receives $500 in payments from the customers that were billed for rentals on October 20.
-Refer to the transactions for Krenshaw Rentals. Based on the October 31 transaction, Krenshaw will record which of the following in its accounting records?

• A) A credit in Accounts Payable for $500.
• B) A credit in Accounts Receivable for $500.
• C) A debit in Accounts Payable for $500.
• D) A debit in Accounts Receivable for $500.

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