Solstice company, which uses the direct write-off method, determines on october 1 that it cannot collect $66,000 of its accounts receivable from its customer, p. moore. on october 30, p. moore unexpectedly pays his account in full to solstice company. record solstice’s entries for recovery of this bad debt.

The journal entry for recovery is shown below:

Explanation:

When the company, determine that it could not collect the amount, then the entry which should be recorded is:

Accounts receivable A/cDr  $66,000

            Bad debts expenseA/cCr  $66,000

But on October 30, the company received the full amount from the customer, then entry for recovery of the bad debt is as:

Cash A/cDr    $66,000

      Accounts Receivable A/cCr   $66,000

the correct option is c

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