Answer:
a. Debit Allowance for doubtful debt $1,300
Debit Allowance for doubtful debt $6,300
Credit Accounts receivable $7,600
Being entries to write off debts from Oakley Co. and Brookes Co.
b. Debit Accounts receivable $1,300
Credit Allowance for doubtful debt $1,300
Debit Allowance for doubtful debt $1,300
Credit Bad debt expense $1,300
Being entries to reinstate account receivable due from Oakley Co.
Debit Cash account $1,300
Credit Accounts receivable $1,300
Being entries to record cash received
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.
