I need help please I don't understand this at all. Thanks.
Part A: Prepare general journal entries to record the following transactions for the Harris Company. (The company uses the balance sheet approach for recording bad debts expense.)
2010
Dec. 31 Record Bad Debts Expense, $800
2011
Jan. 3 Wrote off Jal's account as uncollectible, $60
Mar. 4 Wrote off Halls account as uncollectible, $75
Jul. 5 Recovered $45 from Hall
Aug. 19 Wrote off M. Wilson's account as uncollectible, $100
Nov. 7 Recovered $25 from Jal
I need help with it please if someone could explain?
To prepare general journal entries for the transactions provided, you need to follow the basic format for journal entries:
1. Date: Write the date of the transaction.
2. Account Title: Identify the accounts involved in the transaction.
3. Debit: Record the amount to be debited for each account.
4. Credit: Record the amount to be credited for each account.
5. Explanation: Provide a brief explanation of the transaction.
Let's go through each transaction step by step:
2010
Dec. 31: Record Bad Debts Expense, $800
To record this transaction:
- Date: Dec. 31, 2010
- Account Title: Bad Debts Expense (Debit) and Allowance for Doubtful Accounts (Credit)
- Debit: $800 (Bad Debts Expense)
- Credit: $800 (Allowance for Doubtful Accounts)
- Explanation: Record bad debts expense of $800, in accordance with the balance sheet approach.
The entry would look like this:
Date | Account Title | Debit | Credit | Explanation
Dec. 31 | Bad Debts Expense | $800 | | Record bad debts expense
Dec. 31 | Allowance for Doubtful Accounts | | $800 | Record the increase in allowance for doubtful accounts
Next, let's move on to the transactions in 2011:
Jan. 3: Wrote off Jal's account as uncollectible, $60
To record this transaction:
- Date: Jan. 3, 2011
- Account Title: Allowance for Doubtful Accounts (Debit) and Accounts Receivable - Jal (Credit)
- Debit: $60 (Allowance for Doubtful Accounts)
- Credit: $60 (Accounts Receivable - Jal)
- Explanation: Record the write-off of Jal's account as uncollectible, reducing the accounts receivable and offsetting it with the allowance for doubtful accounts.
The entry would look like this:
Date | Account Title | Debit | Credit | Explanation
Jan. 3 | Allowance for Doubtful Accounts | $60 | | Write off Jal's account as uncollectible
Jan. 3 | Accounts Receivable - Jal | | $60 | Reduce accounts receivable
Continue following the same process for the remaining transactions. Remember to adjust the balance in the allowance for doubtful accounts accordingly:
Mar. 4: Wrote off Halls account as uncollectible, $75
Jul. 5: Recovered $45 from Hall
Aug. 19: Wrote off M. Wilson's account as uncollectible, $100
Nov. 7: Recovered $25 from Jal
By following the format shared above, you can record the journal entries for these transactions as well.