Final answer:
To reinstate a written-off account after collection, Planter Corp would debit Allowance for Doubtful Accounts and credit Accounts Receivable. This does not involve Bad Debt Expense as the write-off has already been recorded in the period it occurred. The process adheres to the matching principle, affecting the balance sheet but not the income statement during the recovery period.
Step-by-step explanation:
When Planter Corp collected the full payment from a customer after the account had been previously written off, the accounting entry to reinstate the account would involve a debit to the Allowance for Doubtful Accounts and a credit to Accounts Receivable. This reversal process is a two-step procedure. Firstly, the company would reverse the write-off by debiting Allowance for Doubtful Accounts and crediting Accounts Receivable. Secondly, upon collection, the company would debit Cash and credit Accounts Receivable, to reflect the receipt of cash.
Reinstating the account does not involve the Bad Debt Expense as the collection occurs after the account has already impacted the expense account in the period it was written off. By debiting Allowance for Doubtful Accounts, Planter Corp negates the previous effect on the allowance and acknowledges the recoverability of the previously written-off amount.
This approach aligns with the matching principle in accounting, which states that revenues and their related expenses should be matched within the same accounting period. Therefore, the recovery of a previously written-off account affects the balance sheet but does not impact the income statement in the period of recovery.