Problem
Jon paid Morton Company $350 for services to be performed in the future. The bookkeeper for Morton Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. What should the bookkeeper do to correct this entry?
i. Debit Accounts Receivable $350 and credit Cash $350.
ii. Debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
iii. Debit Accounts Receivable $350 and credit Service Revenue $350.
iv. Debit Cash $350 and credit Unearned Service Revenue $350.