At the end of 2020, Concord Company has accounts receivable of $784,000 and an allowance for doubtful accounts of $39,200. On January 16, 2021, Concord Company determined that its receivable from Ramirez Company of $5,880 will not be collected, and management authorized its write-off.

Prepare the journal entry for Concord Company to write off the Ramirez receivable.

Question

Hadley Brown

Business

11 April, 19:48

At the end of 2020, Concord Company has accounts receivable of $784,000 and an allowance for doubtful accounts of $39,200. On January 16, 2021, Concord Company determined that its receivable from Ramirez Company of $5,880 will not be collected, and management authorized its write-off.

Prepare the journal entry for Concord Company to write off the Ramirez receivable.

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Lexie Raymond · Answer 1

Journal Entry

Dr. Allowance for doubtful accounts $5,880

Cr. Account Receivable $5,880

Explanation:

When a receivable of the business is considered to be non-collectible from a customer, it is written off from the accounts. This event will decrease the account receivable balance and allowance for the doubtful accounts too. a Debit entry in the Allowance for doubtful account and a credit entry in accounts receivable is made to incorporate the effect of this transaction.