Answer: See the required journal entries below.
Explanation: See below steps to record the transactions that occurred during the period and recognize ultimately the bad debt expense.
Step 1: Recognize the transactions during the period
Debit Accounts receivables $944,000
Credit Sales revenue $944,000
(To recognize the sales on account)
Debit Cash $901,000
Credit Accounts receivable $901,000
(To recognize sales collection)
Debit Allowance for doubtful account $6,300
Credit Accounts receivable $6,300
(To recognize the write-off of accounts receivable)
Debit Cash $2,200
Credit Bad debt recovery (income statement/other income) $2,200
(Collection of accounts receivable previously written off)
Step 2: Movement schedules of accounts receivable and allowance for doubtful accounts
Accounts receivable
Balance, beginning of the period $145,000
Addition: Net credit sales 944,000
Less: Collections 901,000
Write-off 6,300
Balance, end of the period $181,700
Allowance for doubtful accounts
Balance, beginning of the period $11,480
Less: Write-off 6,300
Balance, end of the period (unadjusted) $5,180
Step 3: Journals for bad debt expense
Debit Bad debt expense [(9% * $181,700) - $5,180] $11,173
Credit Allowance for doubtful account $11,173
(To record bad debt expense for the period)
