At year-end (December 31), Chan Company estimates its bad debts as 0.20% of its

Question

At year-end (December 31), Chan Company estimates its bad debts as 0.20% of its annual credit sales of $621,000, Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $311 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 Record the estimated bad debts expense Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal

Explanation / Answer

Date General Journal Debit Credit 31-Dec Bad debts expense 1,242 =621000*0.2% Allowance for doubtful accounts 1,242 1-Feb Allowance for doubtful accounts 311 Accounts receivable—P. Park 311 5-Jun Accounts receivable—P. Park 311 Allowance for doubtful accounts 311 5-Jun Cash 311 Accounts receivable—P. Park 311

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