Question

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $800 account of a customer, C. Green. On March 9, it receives a $300 payment from Green. 1. Prepare the journal entry for January 31. 2. Prepare the journal entries for March 9; assume no additional money is expected from Green.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

On January 31

Allowance for doubtful accounts A/c Dr $800

To Account receivable A/c $800

(Being the written off amount is recorded)

On January 31

Account receivable A/c Dr $300

To Allowance for doubtful accounts A/c $300

(Being the reverse entry is made)

On March 9

Cash A/c Dr $300

To Accounts receivable A/c $300

(Being the amount is collected)