20-1 May 5 Wrote off $2,360 owed by Neal Dammond, who has no assets. July 18 Wrote off $1,255 owed by Maxine Mouse, who has made no payments in more than a year. Sept. 20 Reinstated the account of Neal Dammond, which had been written off on May 5, and received $2,360 cash in full settlement. 20-2 May 11 Reinstated the account of Maxine Mouse, which had been written off in the previous year, and received $1,255 cash in full settlement. Required: Record these transactions in general journal form.
20-1 May 5 Wrote off $2,360 owed by Neal Dammond, who has no assets. July 18 Wrote off $1,255 owed by Maxine Mouse, who has made no payments in more than a year. Sept. 20 Reinstated the account of Neal Dammond, which had been written off on May 5, and received $2,360 cash in full settlement. 20-2 May 11 Reinstated the account of Maxine Mouse, which had been written off in the previous year, and received $1,255 cash in full settlement. Required: Record these transactions in general journal form.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| 20-1 | |
| May 5 | Wrote off $2,360 owed by Neal Dammond, who has no assets. |
| July 18 | Wrote off $1,255 owed by Maxine Mouse, who has made no payments in more than a year. |
| Sept. 20 | Reinstated the account of Neal Dammond, which had been written off on May 5, and received $2,360 cash in full settlement. |
| 20-2 | |
| May 11 | Reinstated the account of Maxine Mouse, which had been written off in the previous year, and received $1,255 cash in full settlement. |
Required:
| Record these transactions in general journal form. |
X
Chart of Accounts
| CHART OF ACCOUNTS | |||
| Madonna’s Music Store | |||
| General Ledger | |||
|
Expert Solution
Step 1
- Written off means eliminating the account and record it as expense.
Analysis
Accounts Receivables asset will decrease as the amount is not expected to be recovered.
Bad Debt expense will increase as amount turns to be unpaid.
Effect
Increase in expense recorded as debit.
Decrease in asset recorded as credit.
- Reinstating the account means restoring the account which was eliminated previously
Analysis
Here,Accounts Receivable and Bad Debt Expense is reopened. Opposite effect of written off is recorded.
Effects
Accounts Receivable is increase ( recreated) recorded as debit.
Bad Debt expense increase ( recreated) recorded as credit.
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