Question

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.

Answer 1

Answer:

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.