Question

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,100 account of a customer, C. Green. On March 9, it receives a $1,600 payment from Green.
Prepare the journal entry or entries for January 31.
Prepare the journal entry or entries for March 9; assume no additional money is expected from Green.

Answer 1

Answer: Please see answer in explanation column

Explanation:

a) Journal entry to write off an uncollectible amount.

Date          Account                                         Debit             Credit

Jan 31st    Allowance for doubtful accounts  $2,100

Accounts receivable—C. Green                                          $2,100

b) Journal to record recovery of the bad debt.

Date          Account                                         Debit             Credit

Mar 9  Accounts receivable—C. Green        $1,600

Allowance for doubtful accounts                                         $1,600

c) Journal to record payment on account.

Date          Account                                         Debit             Credit

Mar 9      Cash                                                 $1,600

Accounts receivable—C. Green                                           $1,600