Question

The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.

June 12, 2021 Provide services to customers on account for $39,200.

September 17, 2021 Receive $23,500 from customers on account.

December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received.

March 4, 2022 Provide services to customers on account for $54,200.

May 20, 2022 Receive $10,000 from customers for services provided in 2021.

July 2, 2022 Write off the remaining amounts owed from services provided in 2021.

October 19, 2022 Receive $43,500 from customers for services provided in 2022.

December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received.

Required: 1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal entry

date	account and explanation	Debit	Credit
June 12	Account receivable	39200
	Service revenue		39200
Sep 17	Cash	23500
	Account receivable		23500
Dec 31	Bad debt expense (39200-23500)*45%	7065
	Allowance for doubtful accounts		7065
Mar 4	Account receivable	54200
	Service revenue		54200
May 20	Cash	10000
	Account receivable		10000
July 2	Allowance for doubtful accounts	5700
	Account receivable		5700
Oct 19	Cash	43500
	Account receivable		43500
Dec 31	Bad debt expense (10700*45%-1365)	3450
	Allowance for doubtful accounts		3450