Bad Debts and Bad Debts Recovered
5. Pass Journal entries for the following transactions:
2020
April 1
Mohan is declared insolvent. Received first and final dividend from his official Receiver 50 paise
in a rupee against a debt of 5,000
April
2
rupees 8.000 due from Ramesh is not recoverable
April 3
Shyam, who owed 15,000 became insolvent and 50% is received from his estate
April 4
Received 10,000 in cash from Sohan for bad debts written off last year
Answers
Answer:
Here is your answer
Explanation:
April 1
Cash a/c Dr. 2500
Bad Debts a/c Dr. 2500
To Mohan A/c 5000
April 2
Bad debts a/c Dr. 8,000
To Ramesh a/c 8,000
April 3
Cash a/c Dr. 7500
Bad Debts a/c Dr. 7500
To ShyamA/c 15000
April 4
Cash a/c Dr. 10,000
To Bad debts recovered a/c 10 000
The following transactions shall be recorded in the books of the journal as follows:
April 1, 2020
Cash A/c ------Dr. 2500
Bad Debts A/c ------Dr. 2500
To Mohan A/c 5000
(being 50 percent of bad debts recovered from Mohan who is declared insolvent.)
April 2, 2020
Bad debts A/c ------Dr. 8,000
To Ramesh A/c 8,000
(being bad debts of Rs.8,000 declared as Ramesh is declared insolvent.)
April 3, 2020
Cash A/c ------Dr. 7500
Bad Debts A/c ------Dr. 7500
To Shyam A/c 15000
(50 percent of payment received from Shyam who became insolvent.)
April 4, 2020
Cash A/c -------Dr. 10,000
To Bad debts recovered A/c 10 000
(being bad debts recovered from sohan who was declared insolvent.)
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