Question

At the end of 2020, Pharoah Co. has accounts receivable of $762,200 and an allowance for doubtful accounts of $60,300. On January 24, 2021, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $5,800. On March 4, 2021, Pharoah Co. receives payment of $5,800 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.)

Answer 1

To reverse the transaction, the journal entry is:

Date Account title Debit Credit

March 4, 2021 Accounts receivable - Megan Gray $5,800

Allowance for doubtful accounts $5,800

To record the receipt of cash:

Date Account title Debit Credit

March 4, 2021 Cash $5,800

Accounts receivable - Megan Gray $5,800