Question

At the end of 2018, Worthy Co.’s balance for Accounts Receivable is $28,000, while the company’s total assets equal $1,580,000. In addition, the company expects to collect all of its receivables in 2019. In 2019, however, one customer owing $6,000 becomes a bad debt on March 14. Record the write off of this customer’s account in 2019 using the direct write-off method.

Answer 1

Bad debt expense $6,000

To Account receivable $6,000

(being the bad debt expense is recorded)

Step-by-step explanation:

The journal entry is shown below

Bad debt expense $6,000

To Account receivable $6,000

(being the bad debt expense is recorded)

Using the direct write-off method the uncollectible amount is treated as a bad debt for the particular year in which year they are write off

Hence, the $6,000 be treated as a bad debt expense

Plus recording this transaction we debited the bad debt expense as it increased the expenses and at the same time it reduced the asset account so the account receivable would be credited