Question

Prepare general journal entries without explanations to record the following transactions:

Jan    1     Sold merchandise to Kelly Graham for $1,000 on account. The merchandise cost $600 and the company uses a perpetual inventory system and does not expect any returns.

Feb   1     Received $300 from Graham.

Jul     1     Wrote off the balance of Graham’s account as uncollectible.

Sep   1     Unexpectedly received payment in full from Graham.

Answer 1

Date	Account Titles	Debit	Credit
1-Jan	Accounts receivable	$           1,000
	Sales		$          1,000
	Cost of goods sold	$               600
	Merchandise inventory		$              600
1-Feb	Cash	$               300
	Accounts receivable		$              300
1-Jul	Allowance for doubtful accounts	$               700
	Accounts receivable		$              700
1-Sep	Accounts receivable	$               700
	Allowance for doubtful accounts		$              700
	Cash	$               700
	Accounts receivable		$              700
	NOTE: ENTRIES ON JULY 1 AND SEPT 1 ARE MADE WITH THE ASSUMPTION
	THAT THERE IS AN 'ALLOWANCE FOR DOUBTFUL ACCOUNTS'.
	IF IT IS A DIRECT WRITE OFF METHOD THE ENTRIES ON JULY 1 AND SEP 1
	WOULD BE AS GIVEN BELOW:
Date	Account Titles	Debit	Credit
1-Jul	Bad debts expense	$               700
	Accounts receivable		$              700
1-Sep	Accounts receivable	$               700
	Bad debts expense		$              700
	Cash	$               700
	Accounts receivable		$              700