Question

Application Problem 6-5B a-c Majestic Equipment Sales Company, which sells only on account, had a $132,000 balance in its Accounts Receivable and a $6,000 credit balance in its Allowance for Doubtful Accounts on December 31, 2019. During 2020, the company's sales of equipment were $826,000 and its total cash collections from customers were $782,000. During the year, the company concluded that customers with accounts totalling $8,000 would be unable to pay, and wrote these receivables off. However, one of these customers subsequently made a payment of $850. (Note that this amount is not included in the cash collections noted above.) At the end of 2020, management decided that it would use an estimate for had debts of 1% of its credit sales. Prepare the journal entries to record all the 2020 transactions, including the adjustment for bad debts expense at year end. (Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit (To record sales) (Ta record cash collected from customers) (To write off accounts receivable) (Ta reinstate an account that were previously written off) (To record recovery of account that were previously written off) (To recognize the bad debts expense)

Step wise last attempt please

Answer 1

Journal entries

Account title and explanation	Debit	Credit
Account receivable	826000
Sales revenue		826000
(To record sales)
Cash	782000
Account receivable		782000
(To record collection)
Allowance for doubtful accounts	8000
Account receivable		8000
(To record write off)
Account receivable	850
Allowance for doubtful accounts		850
(to record reinstate account)
Cash	850
Account receivable		850
(To record collection)
Bad debt expense (826000*.01)	8260
Allowance for doubtful accounts		8260
(To record bad debt expense)