Assume Jones Company determines it will not be able to collect $500 from Customer Joe Smith for sale of merchandise on account. The journal entry to write off the amount using the direct write off method would be:

Answer and Explanation:

Given:

Amount not recovered = $500

In the books of (Jones Company)

journal entry

Date Account Title and Explanation Debit Credit

Bad Debt Expense A/c Dr $500

Accounts Receivable A/c Cr $500

(Being Sale of $500 not recovered from Joe smith)