The organization prepares each separate customer account on behalf of the customers' accounts receivable. Stock sales, purchases, or returns are recorded in this account.
Oakley Co. and Brookers Co. to write off accounts, the organization must settle their settlement with their respective bad debt amounts as described below.
Journal Entry
Date - Details - Debit - Credit
February 1 - Allowance for Doubtful Accounts $6,800
Accounts Receivable - Oakley Co. - $900
Accounts Receivable - Brookes Co. - $5,900 in February
(to suspicious account ) in the following period, the company realized that $6,800 in customer accounts could not be collected; specifically, $900 to Oakley Co. and $5,900 to Brookes Co.
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