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On December 31, 2007, when its Allowance for Doubtful Accountshad a debit balanc

ID: 2456994 • Letter: O

Question

On December 31, 2007, when its Allowance for Doubtful Accountshad a debit balance of $1,000, North Star Co. estimates that 9% ofits accounts receivable balance of $70,000 will becomeuncollectible and records the necessary adjustment to the Allowancefor Doubtful Accounts. On May 11, 2008, North Star Co. determinedthat J. Tory's account was uncollectible and wrote off $1,200. OnJune 12, 2008, Tory paid the amount previously written off.

Prepare the journal entries on December 31, 2007, May 11, 2008,and June 12, 2008.

E8-6

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