On December 31, after making a concerted effort, management determined that it will not be able to collect the $1,200 owed to it by one of its customers. Prepare the necessary journal entry to write the customer's account off. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Business

Valentina Acevedo

15 February, 08:14

On December 31, after making a concerted effort, management determined that it will not be able to collect the $1,200 owed to it by one of its customers. Prepare the necessary journal entry to write the customer's account off. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Korbin Valdez · Answer 1

Explanation: from the above question, the inability of management to collect any outstanding debt from a customer after a particular time frame is termed a bad debt and it can be written off the books of the company.

From the question above, management determined that it will not be able to collect the $1,200 owed to it by one of its customers.

To write this amount off the books,

Debit : Account receivable $1,200

Credit: bad debit written off $1,200

The bad debt written off is an expense account where the amount uncollectible is expensed from the books of the company.