Question

Debtor. 40000

Bad debts. 2000
Provision for doubtful debts. 2500

Adjustment
1.Further Bad debt 1000
2 Maintain provision for 5% on debts​

Record necessary Journal Entry

Answer 1

When recording journal entries for bad debts and provision for doubtful debts, we need to consider the impact on the debtor's account and the provision account. Profit and Loss (Expense) Account 1500

Step-by-step explanation:

When recording journal entries for bad debts and provision for doubtful debts, we need to consider the impact on the debtor's account and the provision account.

The journal entry to record the further bad debt of $1000 would be:

Debtor Account (Receivable) 1000
Provision for Doubtful Debts Account 1000

The journal entry to maintain the provision for 5% on debts would be:

Provision for Doubtful Debts Account 1500
Profit and Loss (Expense) Account 1500