Question

Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $8,700 of its accounts receivable from Leer Co. 29 Leer Co. unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions.

Answer 1

Answer and Explanation:

The journal entries are shown below;

On Mar 11.

Bad debt exp $8,700

  To Accounts receivable $8,700

(Being the bad debt expense is recorded)

On Mar 29

Accounts receivable $8,700

          To Bad debt exp $8,700

(Being reversal is recorded)

Cash $8,700

             To Accounts receivable $8,700

(being the recovery of the bad debt is recorded)