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At the end of 2013, Blackhorse Productions, Inc., used the aging of accounts rec

ID: 2483377 • Letter: A

Question

At the end of 2013, Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $19,750. The account had an unadjusted credit balance of $10,000 at December 31, 2013. Required: Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) is required for a transaction/event, select "Neo a. b. The appropriate bad debt adjustment was recorded for the year 2013. On January 31, 2014, an account receivable for $1,000 from March 2013 was determined to be uncollectible and was written off view transaction list view general journal Journal Entry Worksheet Record the end-of-period adjustment for bad debts under the aging of accounts receivable method. Transaction General Journal DebitCredit *Enter debits before credits r entry record entry

Explanation / Answer

Solution:

Here is the Journal Entries:

Transaction

General Journal

Debit

Credit

(a)

Bad Debt Expenses Dr.

($19,750 - $10,000)

$9,750

    To Allowance for Doubtful Accounts

$9,750

(b)

Allowance for Doubtful Accounts Dr.

$1,000

    To Accounts Receivable

$1,000

Note:

Entry a --- Since the estimated Allowance for Doubtful Accounts is $19,750 and this account has already $10,000. It is required to make provision for further $9,750 amount for doubtful debts.

Entry b --- Under Allowance for Doubtful Account method, any written off amount is debited to Allowance for Doubtful Account and credited to Accounts receivable.

Transaction

General Journal

Debit

Credit

(a)

Bad Debt Expenses Dr.

($19,750 - $10,000)

$9,750

    To Allowance for Doubtful Accounts

$9,750

(b)

Allowance for Doubtful Accounts Dr.

$1,000

    To Accounts Receivable

$1,000

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