mr. green’s insurance company has a contract with southwest that provides payment of $95 per therapy…

mr. green’s insurance company has a contract with southwest that provides payment of $95 per therapy session. a check for that amount is received from the insurance company. prepare the accounting entry to record the payment and the necessary adjustments to both accounts receivable and medical service revenues:

mr. green’s insurance company has a contract with southwest that provides payment of $95 per therapy session. a check for that amount is received from the insurance company. prepare the accounting entry to record the payment and the necessary adjustments to both accounts receivable and medical service revenues:

Answer

Explanation:

Step1: Identify the accounts involved

When the insurance - company pays for the therapy session, cash is received and accounts receivable is reduced, and medical service revenues have already been recognized.

Step2: Determine the debit and credit entries

Debit cash for the amount received ($95) as it increases. Credit accounts receivable for $95 to reduce the outstanding amount. The accounting entry is: Debit: Cash $95 Credit: Accounts Receivable $95

Answer:

Debit: Cash $95 Credit: Accounts Receivable $95