Answer:
a. Journal Entry
Date Account Titles Debit Credit
Dec 31 Bad Debts Expense $16,000
Allowance for Doubtful Accounts $16,000
To record bad debts expense.
b. Journal Entries:
Date Account Titles Debit Credit
Mar 1 Allowance for
Doubtful Accounts $1,900
Accounts Receivable $1,900
To record the write-off of uncollectible account.
Date Account Titles Debit Credit
May 1 Accounts Receivable $1,900
Allowance for Doubtful Accounts $1,900
To record the reversal of the March 1, 2020 entries.
Date Account Titles Debit Credit
May 1 Cash $1,900
Accounts Receivable $1,900
To record the receipt of check from the customer.
c. Journal Entries:
Date Account Titles Debit Credit
Dec. 31 Bad Debts Expense $40,300
Allowance for Doubtful Accounts $40,300
To record bad debts expense and bring the Allowance for Doubtful Accounts to a credit balance of $38,300.
Explanation:
a) Adjusting journal entries are necessary to ensure that the accounts are reported in accordance with the accrual concept.
