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.

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