diff --git a/src/Candid/Models/Values/CandidService.cs b/src/Candid/Models/Values/CandidService.cs
index c339b200..9f1f924c 100644
--- a/src/Candid/Models/Values/CandidService.cs
+++ b/src/Candid/Models/Values/CandidService.cs
@@ -58,11 +58,7 @@ internal override void EncodeValue(CandidType type, Func<CandidId, CandidCompoun
 				destination.WriteOne<byte>(0);
 				return;
 			}
-			int size = this.principalId!.Raw.Length + 1;
-			Span<byte> bytes = destination.GetSpan(size);
-			bytes[0] = 1; // Set first byte to 1
-			this.principalId.Raw.CopyTo(bytes[1..]); // Set other bytes to raw id
-			destination.Advance(size);
+			CandidValue.Principal(this.principalId!).EncodeValue(CandidType.Principal(), getReferencedType, destination);
 		}
 
 		/// <inheritdoc />
diff --git a/src/Candid/Parsers/CandidByteParser.cs b/src/Candid/Parsers/CandidByteParser.cs
index 167ed881..90c295e1 100644
--- a/src/Candid/Parsers/CandidByteParser.cs
+++ b/src/Candid/Parsers/CandidByteParser.cs
@@ -582,11 +582,14 @@ public Principal ReadPrincipal()
 					// Opaque reference
 					throw new NotImplementedException();
 				}
-				else
-				{
-					List<byte> bytes = this.ReadVectorInner(() => this.ReadByte());
-					return Principal.FromBytes(bytes.ToArray());
-				}
+
+				return this.ReadTransparentPrincipal();
+			}
+
+			private Principal ReadTransparentPrincipal()
+			{
+				List<byte> bytes = this.ReadVectorInner(this.ReadByte);
+				return Principal.FromBytes(bytes.ToArray());
 			}
 
 			public sbyte ReadInt8()
@@ -647,7 +650,7 @@ public CandidService ReadServiceValue()
 				}
 				else
 				{
-					Principal? principalId = this.ReadPrincipal();
+					Principal principalId = this.ReadTransparentPrincipal();
 					return new CandidService(principalId);
 				}
 			}
diff --git a/test/Candid.Tests/CandidEncodingTests.cs b/test/Candid.Tests/CandidEncodingTests.cs
index 8ac1c6bd..86f8d603 100644
--- a/test/Candid.Tests/CandidEncodingTests.cs
+++ b/test/Candid.Tests/CandidEncodingTests.cs
@@ -432,6 +432,33 @@ public void Encode_Record_Recursive()
 			Assert.Equal(expectedArg, actualArg);
 		}
 
+		[Fact]
+		public void Encode_Service_Example1()
+		{
+			const string hex = "4449444C026A000001016901076D6574686F6431000101010A0000000001E0102A0101";
+			var value1 = new CandidService(Principal.FromText("bpo6s-4qaaa-aaaap-acava-cai"));
+			var type1 = new CandidServiceType(new Dictionary<CandidId, CandidFuncType>{
+				{
+					CandidId.Create("method1"),
+					new CandidFuncType(new List<FuncMode>{FuncMode.Query}, new List<CandidType>(), new List<CandidType>())
+				},
+			});
+			var expectedArg = CandidArg.FromCandid(new List<CandidTypedValue>
+			{
+				CandidTypedValue.FromValueAndType(value1, type1)
+			});
+
+
+			byte[] actualBytes = ByteUtil.FromHexString(hex);
+			CandidArg actualArg = CandidArg.FromBytes(actualBytes);
+
+			Assert.Equal(expectedArg, actualArg);
+
+			string actualHex = ByteUtil.ToHexString(expectedArg.Encode());
+
+			Assert.Equal(hex, actualHex);
+		}
+
 
 		[Fact]
 		public void EncodeDecode_1()