60,000 in cash. For similar arrangements, Home usually charged $40,000. A correct journal entry to account for AgriFoods' purchase of Home's services should include options: A。a debit of $ 40,000 to Cafeteria Operating Expense and a debit of $20,000 to Sales Revenue B. a debit of $ 60,000 to Cafeteria Operating Expense and a debit of $20,000 to Deferred Revenue C. a debit of $60,000 to Cafeteria Operating Expense and a credit of $60,000 to Sales Revenue D. No journal entry is required.
AgriFoods, Incorporated prepares and delivers agricultural products to industrial-scale kitchens and food service providers. One of its key customers is Home Kitchen & Company, which provides cafeteria solutions for corporations and universities. On January 1, 2024, AgriFoods obtained a one-year contract to supply a pre-specified amount of vegetables to Home Kitchen, and received $900,000 in cash. Then, on March 15, AgriFoods hired Home to run one of its employee cafeterias for a period of six months, from April to September, and paid $60,000 in cash. For similar arrangements, Home usually charged $40,000. A correct
options:
A。a debit of $ 40,000 to Cafeteria Operating Expense and a debit of $20,000 to Sales Revenue
B. a debit of $ 60,000 to Cafeteria Operating Expense and a debit of $20,000 to Deferred Revenue
C. a debit of $60,000 to Cafeteria Operating Expense and a credit of $60,000 to Sales Revenue
D. No journal entry is required.
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