Question

If Modern Company received $3,650 from Connor Young Company on March 12 for the total amount of an account which had been written off on March 1, the entry to reinstate the account under the direct write-off method would include

Answer 1

Answer:

Journal Entry

Dr. Bad Debt Expense    $3,650

Cr. Account receivables  $3,650

Explanation:

Under Direct Method we charge the bad debt expense directly without any involvement of allowance account. We deduct the written off value from account receivable by a credit entry in it because it is an current asset account which is debit in nature, the decrease will require a credit entry in it.

Answer 2

Answer:

3650

Explanation: