Accounting for Bad Debts The following data were associated with the accounts receivable and uncollectible accounts of Julia Jay, Inc., during 2009:

a. The opening credit balance in Allowance for Bad Debts was $600,000 at January 1, 2009.

b. During 2009, the company realized that specific accounts receivable totaling $630,000 had gone bad and had been written off.

c. An account receivable of $35,000 was collected during 2009. This account had previously been written off as a bad debt in 2008.

d. The company decided that Allowance for Bad Debts would be $650,000 at the end of 2009.

1. Prepare journal entries to show how these events would be recognized in the accounting system using:

a. The direct write-off method.

b. The allowance method.

2. Discuss the advantages and disadvantages of each method with respect to the matching principle.