DEF Pty ltd owes XYZ Ltd an amount of $10,000 as of 30^th June 202 This date is the end of the reporting period for XYZ Ltd. On 20^th July 2021 XYZ ltd received correspondence from ABC liquidators advising of the bankruptcy of DEF Pty Ltd. The correspondence advises XYZ ltd that DEF Ltd has ceased trading in June 2021 and that a liquidation payout of only 10 cents in the dollar will be paid.

01. discuss how the above transaction should be treated, with the journal entries for XYZ Ltd