Question

At December 31, 2019, Metlock Company had a credit balance of $16,100 in Allowance for Doubtful Accounts. During 2020, Metlock wrote off accounts totaling $12,500. One of those accounts ($3,300) was later collected. At December 31, 2020, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $24,400.

Prepare journal entries to record the 2020 transactions of Metlock Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record amount written off)
(To reverse write-off)
(To record collection of writeoff)
(To record estimated bad debts for the year)

Answer 1

Account titles and explanation	Debit	Credit
Allowance for Doubtful Accounts	$12,500
Accounts Receivable		$12,500
(To record amount written off)
Accounts Receivable	$3,300
Allowance for Doubtful Accounts		$3,300
(To reverse write-off)
Cash	$3,300
Accounts Receivable		$3,300
(To record collection of writeoff)
Bad Debt Expense	$17,500
Allowance for Doubtful Accounts[$24,400 – ($16,100 – $12,500 + $3,300)]		$17,500
(To record estimated bad debts for the year)