On February 1, a customer's account balance of $4,300 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?

Question

Kamari Hull

Business

8 July, 19:37

On February 1, a customer's account balance of $4,300 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?

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Answers (1)

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Reynaldo Kirby · Answer 1

The journal entry is shown below.

Explanation:

The journal entry to record the allowance for doubtful account is shown below:

Allowance for Doubtful A/c Dr $4,300

To Accounts Receivable $4,300

(Being Doubtful A/c allowance is recorded)

As bad debts are recorded as expenses to a company, hence they are debited from the account.

Here we use allowance method to record the write-off as company already has a allowance for the bad debt expense.