At the end of 2013, Morley Co. has accounts receivable of $722,900 and an allowa

Question

At the end of 2013, Morley Co. has accounts receivable of $722,900 and an allowance for doubtful accounts of $24,830. 1. On January 24, 2014, it is learned that the company’s receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $5,260. 2. On March 4, 2014, Morley Co. receives payment of $5,260 in full from Spears Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Date Particulars Debit Credit 24.01.2014 Allowance for doubtful debts 5260 To accounts recivable 5260 4.03.2014 Cash 5260 To bad debts recoverable 5260

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