Direct Write-Off Method

Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables:

Oct. 2: Received $2,450 from William Pruitt and wrote off the remainder owed of $2,330 as uncollectible. If an amount box does not require an entry, leave it blank.

Oct. 2

Feedback

Remember that under the direct write-off method, Bad Debt Expense is not recorded until the customer's account is determined to be worthless.

Dec. 20: Reinstated the account of William Pruitt and received $2,330 cash in full payment.

Dec. 20-Reinstate
Dec. 20-Collection