Question

Customer A. Smith owed Stonebridge Electronics $325. On April 27, 2016, Stonebridge determined this account receivable to be uncollectible and written off the account. The company uses the direct write-off method. On July 15, 2016, Stonebridge received a check for $325 from the customer. How should the July 15, 2016 transaction be recorded

Answer 1

Answer:

A Journal was prepared for the receivable bad debt of a customer that owned stone bridge Electronics which us shown below

Explanation:

Solution

The first step to take in this case is to Nationalize the transaction to be recorded for the month of July 15, 2016.

A JOURNAL ENTRY FOR RECEIVABLE BAD DEBT OF $325

                        Particulars              Debit          Credit

July 15, 2016   Cash Account          $325

                        To Bad Debt Expense               $325

Note: The cash and bad debt expense are  both recorded on credit and debit side of the Journal