Question

Refer to the information in Exercise 7-7 to complete the following requirements.

1. On February 1 of the next period, the company determined that \(6,800 in customer accounts was uncollectible; specifically, \)900 for Oakley Co. and $5,900 for Brookes Co. Prepare the journal entry to write off those two accounts.

Short answer

The organization prepares each separate customer account in the name of customers' debtor accounts. This account records the sale, purchase or return transactions for merchandise inventory.

Step-by-step solution

Introduction

To write off the accounts of Oakley Co. and Brookers Co., the organization must settle its accounts with their respective uncollectible amounts as below.

Journal entry

Date	Particulars	Debit	Credit
February 1	Allowance for doubtful accounts	$6,800
	Accounts receivables- Oakley Co.		$900
	Accounts receivables- Brookes Co.		$5,900
	(To record the allowance for doubtful accounts)