Topeka Bike Company received a $940 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $490 and a credit to Service Revenue $490. The correcting entry is:
1. debit Cash, $940; credit Accounts Receivable, $940.
2. debit Accounts Receivable, $940; credit Cash, $450 and Service Revenue, $490.
3. debit Cash, $450 and Service Revenue, $490; credit Accounts Receivable, $940.
4. debit Cash, $450 and Accounts Receivable, $490; credit Service Revenue, $940.