On January 1, Wei company begins the accounting period with a $39,000 credit balance in allowance for doubtful accounts. a. On February 1, the company determined that $8,600 in customer accounts was uncollectible; specifically, $1,800 for Oakley Co. and $6,800 for Brookes Co. Prepare the journal entry to write off those two accounts. b. On June 5, the company unexpectedly received a $1,800 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.
Solution:
Journal Entries
Date | Accounts and Explanation | Debit | Credit |
Feb-01 | Allowance for doubtful accounts | $8,600 | |
Accounts Receivable - Oakley Co. | $1,800 | ||
Accounts Receivable - Brookes Co. | $6,800 | ||
(To record write off uncollectibles) | |||
Jun.-05 | Accounts Receivable - Oakley Co. | $1,800 | |
Allowance for doubtful accounts | $1,800 | ||
(To record the reinstate account that was previously write off) | |||
Jun.-05 | Cash | $1,800 | |
Accounts Receivable - Oakley Co. | $1,800 | ||
(To record cash received) | |||
On January 1, Wei company begins the accounting period with a $39,000 credit balance in allowance...
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