Question

The Branson Company uses the percent of sales method of accounting for uncollectible accounts receivable. During the current year, the following transactions occurred:

Mar. 7	Branson Company determined that the $2,000 account receivable of the Bing Company was uncollectible, and wrote it off.
Jun. 9	Bing Company paid $1,500 of the amount owed to the Branson Company. Branson Company does not expect further collections from the Bing Company.
Dec. 31	Branson Company estimates that 1.5% of its $900,000 of credit sales will be uncollectible.

Prepare the general journal entries to record these transactions.

Answer 1

Journal entry :

Date	accounts & explanation	debit	credit
Mar 7	Allowance for doubtful accounts	2000
	Account receivable		2000
	(To record amount write off)
Jun 9	Account receivable	1500
	Allowance for doubtful accounts		1500
	(To record amount reinstated)
June 9	Cash	1500
	Account receivable		1500
	(To record amount received)
Dec 31	Bad debt expense (900000*1.5%)	13500
	Allowance for doubtful accounts		13500
	(To record bad debt expense)