Question

Alpha Company uses the direct write-off method of recording uncollectible accounts. On August 15, 2016, Yankee Zulu filed for bankruptcy and informed Alpha that he would be unable to pay $550 owed to Alpha. Alpha is certain that it will be unable to collect the $550. Use this information to prepare the General Journal entry (without explanation) for August 15.

Answer 1

Answer:

bad debt expense 550 debit

        accounts receivable         550 credit

Explanation:

Alpha Company uses the direct write-off method of recording uncollectible accounts.

this means when an uncollectible amount arises the company declare the bad debt expense directly. it didn't do a prevision at year-end or at any previous moment.