At the end of 2020, Oriole Co. has accounts receivable of $801,800 and an allowance for doubtful accounts of $66,900. On January 24, 2021, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $5,700. On March 4, 2021, Oriole Co. receives payment of $5,700 in full from Megan Gray.Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To reverse write-off) (To record collection from Gray)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
At the end of 2020, Oriole Co. has
Prepare the
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Account Titles and Explanation
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Debit
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Credit
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(To reverse write-off)
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(To record collection from Gray)
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