Question

there is 3 parts

Required information The following information applies to the questions displayed below) At the beginning of 2021, Brad's Heating & Air (BHA) has a balance of $24,500 in accounts receivable. Because BHA is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts However, at the end of 2021, BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that BHA now will need to use the allowance method. The following transactions occur during 2021 and 2022. 1. During 2021, Install air conditioning systems on account, $175,000 2. During 2021, collect $170,000 from customers on account. 3. At the end of 2021, estimate that uncollectible accounts total 20% of ending accounts receivable. 4. In 2022, customers' accounts totaling $6,500 are written off as uncollectible. Required: 1. Record each transaction using the allowance method. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) View transaction Bat Journal entry worksheet 2 3

Answer 1

Journal entry

No	account and explanation	Debit	Credit
1	Account receivable	175000
	Service revenue		175000
2	Cash	170000
	Account receivable		170000
3	Bad debt expense (29500*20%)	5900
	Allowance for doubtful accounts		5900
4	Allowance for doubtful accounts	6500
	Account receivable		6500

3) Bad debt expense

Bad debt expense	Allowance method	Direct write off method
2021	5900	0
2022	0	6500