Question

Prepare journal entries for each transaction listed. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) At the end of June, bad debt expense is estimated to be $15,000. In July, customer balances are written off in the amount of $7,500

Answer 1

Bad Debts (dr) .. to debtors (cr) = 15000

Cash (dr) .... to debtors (cr) = 7500

Step-by-step explanation:

Journal is the book of recording accounting transactions.

It has following rules :

• Debit all assets, expenses, losses
• Credit all liabilities, incomes, gains

June : bad debt expense is estimated to be $15,000

Bad Debts A/c (debit) 15000

to Debtors A/c (credit) 15000

{ ∵ bad debts is loss, debtors are asset }

July : customer balances are written off in the amount of $7,500

Cash A/c (debit) 7500

to Debtors A/c (credit) 7500

{∵ cash is asset , debtors are asset }