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28 September, 13:13

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $800 account of a customer, C. Green. On March 9, it receives a $300 payment from Green. 1. Prepare the journal entry for January 31. 2. Prepare the journal entries for March 9; assume no additional money is expected from Green.

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  1. 28 September, 14:13
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    The journal entries are shown below:

    On January 31

    Allowance for doubtful accounts A/c Dr $800

    To Account receivable A/c $800

    (Being the written off amount is recorded)

    On January 31

    Account receivable A/c Dr $300

    To Allowance for doubtful accounts A/c $300

    (Being the reverse entry is made)

    On March 9

    Cash A/c Dr $300

    To Accounts receivable A/c $300

    (Being the amount is collected)
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