At the end of 2021, Nash's Trading Post, LLC has accounts receivable of $635,600 and an allowance for doubtful accounts of $23,140. 1. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,210. 2. On March 4, 2022, Nash's Trading Post, LLC receives payment of $4,210 in full from Madonna Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount 2. Enter an account title to record recovery of accounts receivable Enter a debit amount Enter a credit amount Enter an account title to record recovery of accounts receivable Enter a debit amount Enter a credit amount (To record recovery of accounts receivable.) Enter an account title to record collection of accounts receivable Enter a debit amount Enter a credit amount Enter an account title to record collection of accounts receivable Enter a debit amount Enter a credit amount (To record collection of accounts receivable.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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At the end of 2021, Nash's Trading Post, LLC has accounts receivable of $635,600 and an allowance for doubtful accounts of $23,140.
| 1. | On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,210. | |
| 2. | On March 4, 2022, Nash's Trading Post, LLC receives payment of $4,210 in full from Madonna Inc. |
Prepare the
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No.
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Account Titles and Explanation
|
Debit
|
Credit
|
|---|---|---|---|
|
1.
|
Enter an account title
|
Enter a debit amount
|
Enter a credit amount
|
|
Enter an account title
|
Enter a debit amount
|
Enter a credit amount
|
|
|
2.
|
Enter an account title to record recovery of accounts receivable
|
Enter a debit amount
|
Enter a credit amount
|
|
Enter an account title to record recovery of accounts receivable
|
Enter a debit amount
|
Enter a credit amount
|
|
| (To record recovery of accounts receivable.) | |||
|
Enter an account title to record collection of accounts receivable
|
Enter a debit amount
|
Enter a credit amount
|
|
|
Enter an account title to record collection of accounts receivable
|
Enter a debit amount
|
Enter a credit amount
|
|
| (To record collection of accounts receivable.) |
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