Question

Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $9,100 of its accounts receivable from Leer Co. 29 Leer Co. unexpectedly pays its account in full1 to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions. View transaction list Journal entry worksheet 1 2 Record write off of Leer Co. account. Note: Enter debits before credits Date General Journal Debit Credit March 11 Record entry Clear entry View general journal

Answer 1

The required journal entries for the given transactions under direct write off method is shown as follows:-

Journal Entries (Amounts in $)

Date	General Journal	Debit	Credit
March 11	Bad debt expense	9,100
	Accounts Receivable-Leer Co.		9,100
	(To record the write off of Leer Co.)
March 29	Accounts Receivable-Leer Co.	9,100
	Bad debt expense		9,100
	(To record the reinstate of account previously written off)
March 29	Cash	9,100
	Accounts Receivable-Leer Co.		9,100
	(To record cash received on account)

Notes:-

1) Under direct write off method, account is directly written off and no allowance account is used. Accounts receivable is credited and bad debt expense is debited for $9,100.

2) When amount previously written off is received in cash then we need to reinstate the account previously written off by reversing the previous entry (i.e. by crediting bad debt expense and debiting accounts receivable).