Question

ABC Company uses the allowance method for estimating bad debts. Record the following journal entries:

12/31 ABC Company estimates that $5,000 of accounts receivable will be uncollectible.
3/5 ABC Company wrote off a $1,200 account of a customer, B. Brown.

Answer 1

Date Account titles and Explanations Debit Credit

31 Dec Bad debts expense $5,000

Allowance for uncollectible accounts $5,000

(To record bad debts expense recorded)

5 Mar Allowance for uncollectible accounts $1,200

Accounts receivable $1,200

(To record account written off)