Quantum Solutions Company, a computer consulting firm, has decided to write off the $33,550 balance of an account owed by a customer

Quantum Solutions Company, a computer consulting firm, has decided to write off the $33,550 balance of an account owed by a customer, Alliance Inc. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used.

Answer:

a. 

Bad Debt Expense 33,550

         Accounts Receivable—Alliance Inc. 33,550

b. 

Allowance for Doubtful Accounts 33,550

         Accounts Receivable—Alliance Inc. 33,550