At the end of 2016, Sunland Company has accounts receivable of $653,700 and an allowance for doubtful accounts of $24,200.

On January 24, 2017, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,245.

On March 4, 2017, Sunland Company receives payment of $4,245 in full from Madonna Inc.

Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Question

Business

Kiera Gould

15 May, 02:35

At the end of 2016, Sunland Company has accounts receivable of $653,700 and an allowance for doubtful accounts of $24,200.

On January 24, 2017, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,245.

On March 4, 2017, Sunland Company receives payment of $4,245 in full from Madonna Inc.

Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Answers (1)

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Kyle Branch · Answer 1

allowance for doubtful accounts 4,245 debit

accounts receivables 4,245 credit

--to record write-off of Madonna Inc account--

Explanation:

Prepare the journal entry to record the write-off.

To record the write-off we will decrease both, the allowance and the accounts receivable for the amount we consider uncollectible. Under allowance method the company never uses bad debt expense at write-off it only does at year-end adjustment