Entries for Bad Debt Expense under the Direct Write-Off and Allowance Methods

The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31:

Apr. 13. Wrote off account of Dean Sheppard, $8,450.

May 15. Received $500 as partial payment on the $7,100 account of Dan Pyle. Wrote off the remaining balance as uncollectible.

July 27. Received $8,450 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt.

Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry):

Paul Chapman $2,225

Duane DeRosa 3,550

Teresa Galloway 4,770

Ernie Klatt 1,275

Marty Richey 1,690

31. If necessary, record the year-end adjusting entry for uncollectible accounts.

If no entry is required, select "No entry" and leave the amount boxes blank. For compound entries, if an amount box does not require an entry, leave it blank.

a. Journalize the transactions under the direct write-off method.

Apr. 13

May 15

July 27-reinstate

July 27-collection

Dec. 31-write-off

Dec. 31-adjusting