For journal entries in this assignment, enter AR for Accounts Receivable, ADA for Allowance for Doubtful Accounts, BAD for Bad Debt Expense, REV for Sales Revenue, and CASH for Cash. Please be careful as you type, because Blackboard is not forgiving! Enter all numeric answers in whole dollars but without a $. Priestly Inc. records sales on account of $120,000 during the month of June. The company estimates bad debt expense as of 3% of credit sales.
A. Show the journal entry for the June sales on account (enter account name from the choices in the general instructions above, and then the amount).
o Debit: [a] [b]
o Credit: [c] [d]
B. Show the journal entry for June's bad debt expense.
o Debit: [e] [f]
o Credit: [g] [h]
C. Assuming Priestly's opening balance of Accounts Receivable on June 1 was $0, what is its balance of net Accounts Receivable after the two entries above?
Just before closing its books on June 30, Priestly learns that one of its customers, the McKay Company, has run into financial difficultly and cannot pay an invoice totaling $2,300. Priestly decides to write off McKay's account.
i. Show the journal entry for the write-off.
o Debit: [j] [k]
o Credit: [U] [m]
ii. What is Priestly's balance of net Accounts Receivable after the write-off? [
On July 15, Priestly is pleasantly surprised to receive a check for $1,200 from McKay with a note saying the remainder of the balance due will be sent in two weeks.
A. Show the journal entry to reinstate the account for which payment has been received.
o Debit: [o] [p]
o Credit: [q] [r]
B. Show the journal entry to record McKay's payment of $1,200.
o Debit: [s] [t]
o Credit: [u] [v]
C. What is Priestly's balance of net Accounts Receivable after the entries pertaining to Mckay?