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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Nillson’s Nursery uses the direct write-off method for recording bad debts.

Required

Journalize the following selected entries:

2012

Apr. 10    Write off the account of P. A. Seldon as uncollectible, $458.

July 27    Write off the account of J. M. Weller as uncollectible, $268.

Check Figure

Total amount debited to Bad

Debts Expense $726

To determine

Prepare the journal entries for N Nursery.

Explanation

Direct write-off method: The method of directly expensing the uncollectible amount as bad debt expense is referred to as direct write-off method.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Prepare the journal entries for N Nursery.

Transaction on Aril 10, 2012:

Date Account Titles and Explanation Post Ref. Debit ($) Credit ($)
2012        
April 10 Bad Debts Expense   458  
       Accounts Receivable     458
    (Record the write off of accounts receivable that is worthless)      

Table (1)

Description:

  • Bad Debts Expense is an expense account...

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