Explore BrainMass

Explore BrainMass

    Allowance method for bad debts

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Milner Corp. uses the allowance method to account for uncollectibles. On October 31, it wrote off a $1,000 account of a customer, C. Schaub. On December 9, it receives a $200 payment from Schaub.

    1. Prepare the journal entry or entries for October 31.
    2. Prepare the journal entry or entries for December 9: assume no additional money is expected from Schaub.

    © BrainMass Inc. brainmass.com March 4, 2021, 7:58 pm ad1c9bdddf

    Solution Preview

    1. Prepare the journal entry or entries for October 31.

    Since Milner Corp uses the allowance method, it would have created an Allowance for Doubtful Accounts. When a account is written off we utilize the allowance account. When the account is written off, ...

    Solution Summary

    The solution explains journal entries for collection of a written off accounts receivable under the allowance method