Question

Journalize the appropriate entries for bad debt expense and payments, if any, for each independent scenario:On June 30, Brown Company had credit sales were $500,000 for the period. Accounts receivable balance was $20,000. Brown Company determined that Blue Company’s accounts receivable account which made up 50% of the accounts receivable balance was uncollectible and wrote-off the uncollectible amount on June 30 under the direct write-off method. Blue Company made a $5,000 payment on the written off account on August 1

Answer 1

--required journal entries

Date	Accounts title	Debit	Credit
30-Jun	Bad Debt Expense	$10,000
	Accounts receivables ($ 20000 x 50%)		$10,000
	(to record written off)
01-Aug	Accounts receivables	$5,000
	Bad Debt Expense		$5,000
	(to reinstate written off account)
	Cash	$5,000
	Accounts receivables		$5,000
	(to record collection)
OR
01-Aug	Cash	$5,000
	Bad Debt Expense		$5,000
	(to record collection)