During its first year of operations, Ivanhoe Company had credit sales of $2,781,600, of which $368,300 remained uncollected at y
ear-end. The credit manager estimates that $19,340 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Assume an unadjusted balance of zero in Allowance for Doubtful Accounts.)
Account Titles and Explanation | Debit | Credit
The journal entry to record the bad debt expense is shown below:
Bad debt expense A/c Dr $19,340
To Allowance for doubtful debts $19,340
(Being estimated uncollectible amount is recorded)
For recording this journal entry, we debited the bad debt expense account and credited the Allowance for doubtful debts so that the amount is correctly recorded in the correct item.
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once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods so that the results reported from period to period are comparable.
