15. County General Hospital is a not-for-profit entity. The hospital billed $900,000 to Delta Medical Group,...

 

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15. County General Hospital is a not-for-profit entity. The hospital billed $900,000 to Delta Medical Group, a health insurance company (third-party payer) that provides indemnity-type health insurance coverage. Delta pays for services rendered to its policyholders using a rate schedule based on the types of procedures rendered. For the services rendered during the current month, Delta will reimburse the Hospital $760,000. What journal entry(ies) should the hospital prepare to record the billing? a) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 b) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $760,000 and Allowance for Doubtful Accounts $140,000 c) Debit 3rd Party Receivable $760,000; Credit 3rd Party Revenue $760,000 d) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 AND Debit Bad Debt Expense $140,000; Credit Allowance for Doubtful Accounts $140,000 e) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 AND 15. County General Hospital is a not-for-profit entity. The hospital billed $900,000 to Delta Medical Group, a health insurance company (third-party payer) that provides indemnity-type health insurance coverage. Delta pays for services rendered to its policyholders using a rate schedule based on the types of procedures rendered. For the services rendered during the current month, Delta will reimburse the Hospital $760,000. What journal entry(ies) should the hospital prepare to record the billing? a) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 b) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $760,000 and Allowance for Doubtful Accounts $140,000 c) Debit 3rd Party Receivable $760,000; Credit 3rd Party Revenue $760,000 d) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 AND Debit Bad Debt Expense $140,000; Credit Allowance for Doubtful Accounts $140,000 e) Debit 3rd Party Receivable $900,000; Credit 3rd Party Revenue $900,000 AND

Answer rating: 100% (QA)

Solution Answer A debit 3rd party receivable ... View the full answer