At year-end (December 31), Chan Company estimates its bad debts as 1.00% of its annual credit sales of $917,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $459 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions.

Dec 31

Dr Bad debts expense 9,170

Cr Allowance for doubtful accounts 9,170

Feb 01

Dr Allowance for doubtful accounts $459

Cr Accounts receivable—P. Park $459

Jun 05

Dr Accounts receivable—P. Park $459

Cr Allowance for doubtful accounts $459

Jun 05

Dr Cash $459

Cr Accounts receivable—P. Park $459

Explanation:

Preparation of Chan's journal entries for the transactions.

Dec 31

Dr Bad debts expense 9,170

Cr Allowance for doubtful accounts 9,170

(1.00%*$917,000)

Feb 01

Dr Allowance for doubtful accounts $459

Cr Accounts receivable—P. Park $459

Jun 05

Dr Accounts receivable—P. Park $459

Cr Allowance for doubtful accounts $459

Jun 05

Dr Cash $459

Cr Accounts receivable—P. Park $459

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