Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Ahmed Company has BD15000 balance of account receivable, one of customer Taha become bankrupt and he is unable to pay his Balance of BD1500, the journal entry will * be (4 ????) CR bad debt expense 1500, DR account receivable 1500 DR bad debt expense 15000, CR account receivable 15000 DR bad debt expense 1500, CR account receivable 1500
Ahmed Company has BD15000 balance of account receivable, one of customer Taha become bankrupt and he is unable to pay his Balance of BD1500, the journal entry will * be (4 ????) CR bad debt expense 1500, DR account receivable 1500 DR bad debt expense 15000, CR account receivable 15000 DR bad debt expense 1500, CR account receivable 1500
Accounts Receivable Balance -> BD15000
Taha's Balance which is now bad debt -> BD1500
So, This means Accounts Receivable will be reduced by the amount of Bad debt i.e BD1500 caused by bankruptcy of Taha.
Since the Taha was Debtor , He was asset earlier. But now His balance will be written off as Bad Debt expense. Accounts receivable will be credited because asset is reducing.
Journal entry would be:-
Bad debt Expense (Debit) BD1500
Accounts receivable (Credit) BD1500
(To record bad debt expense of BD1500)
So,OPTION C is correct.
Hope you understood the entry. If any query feel free to ask in comment section.
Thankyou! Have a nice day
