Question

Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $6,100. On September 9, the customer unexpectedly pays the $6,100 balance. Record the cash collection on September 9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer:

Record the cash collection on September 9

Bank $6,100 (debit)

Bad Debt $6,100 (credit)

Explanation:

When Barnes writes off a customer account on May 7

Bad Debts $6,100 (debit)

Account Receivable $6,100 (credit)

When the customer unexpectedly pays the $6,100 balance on September 9

Bank $6,100 (debit)

Bad Debt $6,100 (credit)

Recognise the Assets of Cash Flowing in the entity and De-recognise the Bad Debts expense account.