On December 31, 2014, Extreme Fitness has adjusted balances of $940,000 in Accou

Question

On December 31, 2014, Extreme Fitness has adjusted balances of $940,000 in Accounts Receivable and $83,000 in Allowance for Doubtful Accounts. On January 2, 2015, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $24,000 Assume that on February 2, 2015, Extreme Fitness received a payment of $1,900 from one of the customers whose balance had been written off. Prepare the journal entries to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list X: Record the reversal of a customer account previously written off in the amount of $1,900 Record the receipt of cash of $1,900 from the customer. 1 e amount 2

Explanation / Answer

31.12.2014 Account Recievable 940000 Allowance for Doubtful Debts 83000 Note: In absence of information about method used; We are using Allowance Method: Date Particulars Amount Dr. Amount Cr. 02.01.2015 Allowance for Doubtful Debts Accounts Dr. 24000 To Accounts Recievables Account 24000 (Being Account Written off) 02.02.2015 Accounts Recievables Account Dr. 1900 To Allowance for Doubtful Debts Accounts 1900 (Being Account written off, Reinstated In Books) 02.02.2015 Cash Account Dr. 1900 To Accounts Recievables Account 1900 (Being Payment against the reinstated account received)

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