Question

On December 31,2024 , when its Allowance for Doubtful Accounts had a debit balance of $1,469, Cullumber Co. estimates that 11% of its accounts receivable balance of $77,700 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2025, Cullumber Co. determined that B. Jared's account was uncollectible and wrote off \$1,139. On June 12, 2025, Jared paid the amount previously written off. Prepare the journal entries on December 31, 2024, May 11, 2025, and June 12, 2025.

Answer 1

December 31, 2024:

To record the adjustment to the Allowance for Doubtful Accounts, we will debit Bad Debt Expense and credit Allowance for Doubtful Accounts.

Bad Debt Expense (debit) $8,547.00

Allowance for Doubtful Accounts (credit) $8,547.00

May 11, 2025:

To write off B. Jared's account as uncollectible, we will debit Allowance for Doubtful Accounts and credit Accounts Receivable.

Allowance for Doubtful Accounts (debit) $1,139.00

Accounts Receivable (credit) $1,139.00

June 12, 2025:

To record the payment received from B. Jared, we will debit Accounts Receivable and credit Allowance for Doubtful Accounts.

Accounts Receivable (debit) $1,139.00

Allowance for Doubtful Accounts (credit) $1,139.00

Please note that the amounts used in the journal entries are based on the given information.