This company uses the Allowance Method for accounting for bad debts: Use the below journal to prepare these transactions April 3rd - Wrote off $3,200 owed by Jane Smith who filed bankruptcy June 5th - Wrote off $4,500 owed by David Duke who has made no payments in a year Dec. 15th - David Duke came in and paid $600 on the account that was written off on June 5th. of Paragraph III This company uses the Allowance Method for accounting for bad debts: Use the below journal to prepare these transactions April 3rd - Wrote off $3,200 owed by Jane Smith who filed bankruptcy June 5th - Wrote off $4,500 owed by David Duke who has made no payments in a year Dec. 15th - David Duke came in and paid $600 on the account that was written off on June 5th