Opportunity Inc. has past due receivables of $3,000 that it does not feel will be collected and wants to write off these amounts. Â Prepare the journal entry to write off this bad debt on July 1 under the (a) direct write off method and (b) the allowance method. Â For each method, decide if a year-end adjusting entry is required for bad debts expense or not.
a)Â direct write off method
| Date | Description | Debit | Credit |
|---|---|---|---|
| July 1 | |||
| July 1 |
Is year end adjusting entry required?
b)Â the allowance method
| Date | Description | Debit | Credit |
|---|---|---|---|
| July 1 | |||
| July 1 |
Is year end adjusting entry required?