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Brubacher Service Company sells for cash and on account. Buy selling on account, Brubacher cannot expect...

Brubacher Service Company sells for cash and on account. Buy selling on account, Brubacher cannot expect to collect 100% of its accounts receivable The following transactions took place for the year ended December 31, 2020:

a. Issued invoices for service revenue on account totalling $670,000.

b. Received collections from customers (relating the invoices on account) totalling $630,000.

c. Wrote off specific customer accounts determined to be uncollectible totalling $30,000.

d. Recovered a customer account, that had previously been written off, $5,000.

e. Estimated bad debt expense for the year to be $33,500

f. On December 1, Brubacher received a 2 month, 7%, $4,000 note receivable from one of its customers in exchange for the customer’s past due account. Brubacher made the proper year-end adjusting entry for the interest on this note.

Required:
Prepare the journal entries to record the above transactions.

Business   Accounting   
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Answer #1

Journal entries

No General Journal Debit Credit
a Account receivable 670000
Service revenue 670000
b Cash 630000
Account receivable 630000
c Allowance for doubtful accounts 30000
Account receivable 30000
d Account receivable 5000
Allowance for doubtful accounts 5000
Cash 5000
Account receivable 5000
e Bad debt expense (33500+25000) 58500
Allowance for doubtful accounts 58500
f Interest receivable (4000*7%*1/12) 23.33
Interest revenue 23.33
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