during 2026, its first year of operations, pave construction provides services on account of $160,000. by…
during 2026, its first year of operations, pave construction provides services on account of $160,000. by the end of 2026, cash collections on these accounts total $110,000. pave estimates that 25% of the uncollected accounts will be uncollectible. in 2027, the company writes off uncollectible accounts of $10,000. required: 1. what is the journal entry to record bad debt expense for the year ended december 31, 2026? 2. what is the journal entry to write off accounts receivable in 2027? note: if no entry is required for a particular transaction or event, select \no journal entry required\ in the first account field. view transaction list journal entry worksheet record the entry for bad debt expense. note: enter debits before credits. transaction general journal debit credit 1
Answer
Explanation:
Step1: Calculate uncollected accounts at end - 2026
Uncollected accounts = $160,000 - $110,000=$50,000
Step2: Calculate bad debt expense for 2026
Bad debt expense = $50,000×25% = $12,500
Step3: Determine journal entry for 2026
Debit Bad Debt Expense for $12,500 and credit Allowance for Doubtful Accounts for $12,500.
Step4: Determine journal entry for 2027 write - off
Debit Allowance for Doubtful Accounts for $10,000 and credit Accounts Receivable for $10,000.
Answer:
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Bad Debt Expense | $12,500 | |
| Allowance for Doubtful Accounts | $12,500 |
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Allowance for Doubtful Accounts | $10,000 | |
| Accounts Receivable | $10,000 |