At the end of 2017, Grouper Company has accounts receivable of $916,100 and an allowance for doubtful accounts of $42,400. On January 16, 2018, Grouper Company determined that its receivable from Ramirez Company of $6,330 will not be collected, and management authorized its write-off. Prepare the journal entry for Grouper Company to write off the Ramirez receivable.

Since the debt has already been provided for by Debiting bad debt expense $42,400 and Crediting Allowance for doubtful debt $42,400, the entries required to write off the debt from Ramirez Company of $6,330 will be

Debit Allowance for doubtful debt $6,330

Credit Accounts receivable $6,330

Being entries to writeoff debt due Ramirez Company of $6,330

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i. e go bad), debit allowance for doubtful debt and credit accounts receivable.

Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.