PE 9-1B Direct write-off method

Journalize the following transactions using the direct write-off method of accounting for
uncollectible receivables:

July 7. Received $500 from Betty Williams and wrote off the remainder owed of
$2,000 as uncollectible.
Nov. 13. Reinstated the account of Betty Williams and received $2,000 cash in full payment

Answer:
July 7
Cash.................................................................... 500  
Bad Debt Expense............................................. 2,000  
                       Accounts Receivable—Betty Williams.......  2,500  

Nov. 13
Accounts Receivable—Betty Williams ............ 2,000  
                       Bad Debt Expense........................................  2,000  
         13
Cash.................................................................... 2,000  
                        Accounts Receivable—Betty Williams.......  2,000

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