Question

Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is:

Answer 1

Answer:

The following entries will be made on July 10

Explanation:

Account Receivable   Dr.$2,000

Bad debt Expense      Cr.$2,000

Bank      Dr.$2,000

Account Receivable Cr.$2,000

Firstly the writ off made on May 3, was reinstated as the amount is collected then in second entry, we recorded collection of cash from A. Hopkins.