McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of $1,600,000 in 2019. McKinney estimates 3.0% of its sales will be uncollectible.

At the end of the first quarter of 2020, McKinney & Co. reevaluates its receivables. McKinneys management decides that $7,900 due from Mangold Corporation will not be collectible. This amount was previously included in the allowance account.

On April 23, 2020, McKinney & Co. receives a check from Mangold Corporation for $7,900.

Required:

Prepare the journal entries for McKinney to record the collection of the account previously written off.

CHART OF ACCOUNTS

McKinney & Co.

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

Prepare the journal entries on April 23 for McKinney to record the collection of the account previously written off.

General Journal Instructions

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GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
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