At year-end (December 31), Chan Company estimates its bad debts as 1% of its annual credit sales
Question:
At year-end (December 31), Chan Company estimates its bad debts as 1% of its annual credit sales of $487,500. Chanrecords its bad debts expense for that estimate. On the following February 1, Chan decides that the $580 account of P.Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare Chan’s journal entries to record the transactions of December 31, February 1, and June 5.
Step by Step Answer:
Dec 31 Bad Debts Expense 4875 Allowance for Doubtful Accounts 4875 Record est...View the full answer
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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