Journal Entries for Credit Losses At the beginning of the year, the Houston Company had the following accounts on its books:

Accounts Receivable$264,000DebitAllowance for Doubtful Accounts$15,800Credit

During the year, credit sales were $2,346,000 and collections on account were $2,350,000. The following transactions, among others, occurred during the year:

Feb.17Wrote off R. St. John's account,$7,500May.28Wrote off G. Herberger's account,$4,800Oct.13Received $1,200 from G. Herberger, who is in bankruptcy proceedings,in final settlement of the account written off on May 28.This amount is not included in the $2,350,000 collections.Dec.15Wrote off R. Clancy's account,$4,500Dec.31In an adjusting entry, recorded the allowance for doubtful accounts at0.7%of credit sales for the year.

Required

a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment.

b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

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General JournalDateDescriptionDebitCreditDec.31Answer