Question

On January 1, Wei company begins the accounting period with a $45,000 credit balance in allowance for doubtful accounts. a. On February 1, the company determined that $9,800 in customer accounts was uncollectible; specifically, $2,400 for Oakley Co. and $7,400 for Brookes Co. Prepare the journal entry to write off those two accounts. b. On June 5, the company unexpectedly received a $2,400 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.

Answer 1

The journal entries are shown below

Step-by-step explanation:

a. Allowance for doubtful accounts $9,800

To Account receivable - Oakley Co $2,400

To Account receivable - Brookes Co $7,400

(Being the written off amount is recorded)

b. Account receivable - Oakley Co $2,400

To Allowance for doubtful accounts $2,400

(Being the reinstated amount is recorded)

c. Cash $2,400

To Account receivable - Oakley Co $2,400

(Being the cash receipt is recorded)

Answer 2

The Journal entry and their narrations is shown below:-

Step-by-step explanation:

1. Allowance for doubtful accounts Dr, $9,800

To Account receivable-Oakley Co. $2,400

To Account receivable-Brookes Co. $7,400

(Being write off is recorded)

2. Account receivable-Oakley Co. Dr, $2,400

To Allowance for doubtful accounts $2,400

(Being amount reinstated is recorded)

3. Cash Dr, $2,400

To Account receivable-Oakley Co. $2,400

(Being cash received is recorded)