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7 March, 05:57

Dexter Company applies the direct write-off method in accounting for uncollectible accounts.

March 11 Dexter determines that it cannot collect $8,900 of its accounts receivable from its customer Leer Company.

29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt.

Prepare journal entries to record the above-selected transactions of Dexter.

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  1. 7 March, 09:27
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    Dexter Company Journal entries

    1. Mar 11

    Dr Bad debt expense 8,900

    Cr Account receivable 8,900

    2. Mar 29

    Dr Account receivable 8,900

    Cr Bad debt recovery 8,900

    3. Mar 29

    Dr Cash 8,900

    Cr Account receivable 8,900

    Explanation:

    1. On Mar 11 we have to record bad debt expense by Debitng Bad debt expense with 8,900 and Crediting Account receivable with 8,900

    2. On Mar 29 we have to reinstated the transaction by Debiting Account receivable with 8,900 and Crediting Bad debt recovery with 8,900

    3. On Mar 29 we have to record Cash collection by Debiting Cash with 8,900 and Crediting Account receivable with 8,900
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