Question

In 2019, Commerford paid $50 of the original $2,000 bill that was previously written off by Trevor. What is the journal entry Trevor Construction needs to make (if any) using the allowance method?

	a.	it will include a credit to cash for $50
	b.	it will include a debit to the Allowance for $50
	c.	it will include both a debit and credit to Accounts Receivable for $50
	d.	it will include a debit to cash for $2,000

Answer 1

Correct answer------------(C) it will include both a debit and credit to Accounts Receivable for $50

.

There will be two separate entries. First to reinstate Receivable then the collection from receivable

General Journal	Debit	Credit
Accounts receivable	$            50.00
Allowance for doubtful accounts		$            50.00
(To reinstate accounts receivable)
Cash	$            50.00
Accounts receivable		$            50.00
(To record collection of receivables)