Question

40000 received from Mohan Pathak was declared insolvent. amount is equal to 40% of the amount due from him.
journal entry

Answer 1

Let the total amount =X
$40 \div 100 \times x = 40000$
$2x \div 5 = 40000$
$2x = 40000 \times 5$
$x = 200000 \div 2$
$x = 100000$

Answer 2

Cash A/c - Dr. 40000
Bad Debt  A/c - Dr. 60000

Mohan A/c - Cr. 1,00,000