Question

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $1,900 account of a customer, C. Green. On March 9, it receives a $1,400 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

Answer and Explanation:

The journal entries are shown below;

Allowance for doubtful accounts $1,900

To Accounts receivable—C. Green $1,900

(being the written off amount is recorded)

Accounts receivable—C. Green $1,400

To Allowance for doubtful accounts $1,400

(being the previously written off is recorded)

Cash Dr $1,400

To Account receivable $1,400

(Being the payment is recorded)