Chapter 8, Problem 1E

Recording Bad Debt Expense Estimates and Write-Offs Using the Aging of Receivables Method

Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $19,750. The account had an unadjusted credit balance of $10,000 at that time.

Required:

Prepare journal entries for each of the following.

1. a. The appropriate bad debt adjustment was recorded.
2. b. Later, an account receivable for $ 1,000 was determined to be uncollectible and was written off.