Question

Prior to recording the following, Elite Electronics, Inc. had a credit balance of $1,500 in its Allowance for Doubtful Accounts.

Required:
Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

a. On August 31, a customer balance for $250 from a prior year was determined to be uncollectible and was written off.
b. On December 15, the customer balance for $250 written off on August 31 was collected in full.

Journal Entry Worksheet

Record the write-off of a certain customer account from a prior year which is not collectible totaling $250.

Answer 1

Answer:

a. On August 31, a customer balance for $250 from a prior year was determined to be uncollectible and was written off.

• Dr Allowance for doubtful accounts 250

•     Cr Accounts receivable 250

b. On December 15, the customer balance for $250 written off on August 31 was collected in full.

• Dr Accounts receivable 250

•     Cr Allowance for doubtful accounts 250

• Dr Cash 250

•     Cr Accounts receivable 250

When a previously written off debt is collected, you must first reverse the write off, and then record the collection of the debt.