recording bad debt expense E6-8 Recording Bad Debt Expense Estimates and Write-O

Question

recording bad debt expense

E6-8 Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of Credit Sales Method LO6-2 During the current year, Sun Electronics, Incorporated, recorded credit sales of $690,000. Based on prior e Based on prior experience, t estimates a 1 percent bad debt rate on credts Required Prepare jounal entries for each transaction (If no entry is required for a transaction/event.select "No journal entry required" in the first account field.) a. On November 13 of the current year, an account receivable for $410 from a prior year was determined to be uncollectible and was wrtten off b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year View transaction list Journal entry worksheet 2 Record the entry to write-off the uncollectible account. Note: Enter debits before credits. Credit General Journal

Explanation / Answer

Journal Entries in the books of Sun Electronis

(a)

Allowance for doubtful accounts      A/c Dr     $ 410

       To Accounts receivable A/c                          Cr               $ 410

(To write off bad debt.)

(b)

Bad Debt Expense ($ 690000 x 1%)           A/c    Dr $ 6,900

          To Allowance for doubtful accounts A/c    Cr $ 6,900

(To record estimated bad debt expense)

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