On December 31, 2019, Skysong, Inc. estimated that 2% of its net accounts receivable of $431,400 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero balance before adjustment on December 31, 2019. On May 11, 2020, Skysong, Inc. determined that the Jeff Shoemaker account was uncollectible and wrote off $2,157. On June 12, 2020, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2019, May 11, 2020, and June 12, 2020.

Question

Konnor Hinton

Business

2 April, 13:06

On December 31, 2019, Skysong, Inc. estimated that 2% of its net accounts receivable of $431,400 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. The allowance account had a zero balance before adjustment on December 31, 2019. On May 11, 2020, Skysong, Inc. determined that the Jeff Shoemaker account was uncollectible and wrote off $2,157. On June 12, 2020, Shoemaker paid the amount previously written off. Prepare the journal entries on December 31, 2019, May 11, 2020, and June 12, 2020.

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Justice Bradley · Answer 1

See explanation section.

Explanation:

December 31, 2019 Bad debt expense Debit $8,628

Allowance for Doubtful Accounts Credit $8,628

To record the estimated uncollectible from accounts receivable.

May 11, 2020 Allowance for Doubtful Accounts Debit $8,628

Accounts receivable Credit $8,628

To record the write off.

June 12, 2020 Accounts receivable Debit $8,628

Allowance for Doubtful Accounts Credit $8,628

To record the reinstatement.

June 12, 2020 Cash Debit $8,628

Accounts receivable Credit $8,628

To record the unexpected payment from previous write off.