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23 July, 06:05

On December 31, after making a concerted effort, management determines that it will not be able to collect the $1,200 owed to it by its customer Acme, Inc. The company uses the direct write-off method to account for uncollectible accounts. Prepare the necessary December 1 journal entry to write off this $1,200 uncollectible account journal entry

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  1. 23 July, 08:56
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    See explanation section

    Explanation:

    To record the journal entry to write off the uncollectible account according to the direct write-off method, we have to use bad dad expanse instead of an allowance account.

    December 31 Bad Debt Expense Debit $1,200

    Account receivable - Acme, Inc. Credit $1,200

    Note: As the company did not get the money from the Acme, Inc., They treated the expense as irrecoverable.
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