At September 30, 2014, the accounts of Mountain Terrace Medical Center (MTMC) include the following:

Accounts Receivable .............$ 145,000

Allowance for Bad Debts (credit balance) .... 3,500

During the last quarter of 2014, MTMC completed the following selected transactions:

Dec. 28 Wrote off accounts receivable as uncollectible: Regan, Co., $ 1,300; Owen Mac, $ 900; and Rain, Inc., $ 700

31 Recorded bad debts expense based on the aging of accounts receivable, as follows:

Requirements
1. Journalize the transactions.
2. Open the Allowance for Bad Debts T-account, and post entries affecting that account. Keep a running balance.
3. Show how Mountain Terrace Medical Center should report net accounts ­receivable on its December 31, 2014, balancesheet.

Transcribed Image Text:

Age of Accounts Accounts Receivable $165,000 Estimated percent uncollectible 1-30 Days 597,000 0.3% 31-60 Days $37,000 61-90 Days $14,000 Over 90 Days $17,000 3% 30% 35%