Question

At the end of 2021, Kingbird, Inc. has accounts receivable of $697,200 and an allowance for doubtful accounts of $22,590. 1. On January 24, 2022, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,513. 2. On March 4, 2022, Kingbird, Inc. receives payment of $4,513 in full from Madonna Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (To record recovery of accounts receivable.) (To record collection of accounts receivable.)

Answer 1

If the business using allowance method for doubtful debts, when ever a accounts receivable becomes not collectible, the balance is transferred to allowance for doubtful debts account. On a latter date if it is collected, the entry is reversed to reinstate the recoverable balance, and then record the receipt of cash.

Account Title	Debit $	Credit $
Allowance for Doubtful Debts	4513.00
Madonna Inc		4513.00
To right off non collectible debts
Madonna Inc	4513.00
Allowance for doubtful debts		4513.00
To record recovery of accounts receivable
Cash	4513.00
Madonna Inc		4513.00
To record collection of accounts receivable

Answer 2

Madonna Inc. Stands for Accounts Receivable in the answer