Answer:
a. Debit Allowance for doubtful debt $4,000
Credit Accounts receivable. $4,000
Being entries to write off debt that had been provided for.
b. Debit bad debit expense $13,000
Credit Allowance for doubtful debt $13,000
Being entries to record bad debt expense for the current year.
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.
Bad debt = 1% * $1,300,000
= $13,000
