Exercise 9-5 Percent of sales method; write-off LO P3 At year-end (December 31),

Question

Exercise 9-5 Percent of sales method; write-off LO P3 At year-end (December 31), Chan Company estimates its bad debts as 080% of its annual credit sales of S769000 Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $385 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off Prepare the journal entries for these transactions View transaction list Journal entry worksheet 2 3 Record the estimated bad debts expense. ces Note: Enter debits before credits. General Journal Debit Dec 31 Record entry Clear entry View general ?ournn1

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Dec 31 Bad debt expense (769000*.80%) 6152    Allowance for doubtful accounts 6152 (To record bad debt expense) Feb 1 Allowance for doubtful accounts 385     Account receivable 385 (To record write off) June 5 Account receivable 385     Allowance for doubtful accounts 385 (To record amount reinstated) June 5 Cash 385    Account receivable 385 (To record collection of amount)

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