E6-10 Recording and Determining the Effects of Bad Debt Transactions on Income S

Question

E6-10 Recording and Determining the Effects of Bad Debt Transactions on Income Statement Categories Using the Percentage of Credit Sales Method LO6-2 During the current year, Giatras Electronics recorded credit sales of $680,000. Based on prior experience, it estimates a 3.5 percent bad debt rate on credit sales Required: 1. Prepare journal entries for each of the following transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. On October 28 of the current year, an account receivable for $2,800 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. View transaction list Journal entry worksheet On October 28 of the current year, an account receivable for $2,800 from a prior year was determined to be uncollectible and was written off Note: Enter debits before credits. Transaction General Journal Debit Credit a, Record entry Clear entry View general journal

Explanation / Answer

Allownce for doubtful accounts

(6,80,000 x 3.5%)

Transaction General Journal Debit Credit a. Bad debt expense 44,200

Allownce for doubtful accounts

(6,80,000 x 3.5%)

44,200 b. Allownce for doubtful accounts 2,800 Accounts receivable 2,800

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