Part 1: Tanis Company uses the Allowance Method for estimating bad debts. On December 31, 2021, Tanis Company had an ending balance of $900,000 in Accounts Receivable and DEBIT balance $3,000 in the Allowance for Doubtful Accounts. Tanis estimates bad debts to be 2% of Accounts Receivable and records the necessary adjustment to the Allowance account.

Prepare the journal entry to recognize bad debt expense for the period.

Part 2: On January 5, 2022, Tanis determined that the account of Carvalho Company, which had a balance of $1,500, would be uncollectible.

Prepare the entry to write off the Carvalho account.

Part 3: On February 3, 2022, Tanis received a check from Carvalho for the $1,500 that they owed to Tanis.

Prepare the entry to show the collection of the Carvalho account.