Question

Blunt Company makes credit sales of $25,000 during the month of February 2019. During 2019, collections are received on February sales of $24,500, accounts representing $500 of these sales are written off as uncollectible, and a $100 account previously written off is collected.

1b. Assume that the bad debts are recorded as they actually occur. Prepare the journal entry on February 28 to record the credit sales for February. Next, record the collections on account, the amount that was written off, and the collection of the account that had been previously written off. HINT there are 10 lines in the answer so 5 entries to the journal, no more or less.

CHART OF ACCOUNTS

Blunt Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

Answer 1

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Blunt
Journal Entries
Account	Debit $	Credit $
Accounts Receivable	25,000.00
Sales		25,000.00
Accounts Receivable	24,500.00
Cash		24,500.00
Bad debt Expense	500.00
Accounts Receivable		500.00
Accounts Receivable	100.00
Bad debt Recovery		100.00
Accounts Receivable	100.00
Cash		100.00