Question

"M/s A & Co. who owes ₹6000 becomes insolvent .Only 30% of the amount due is realised ". how to write a journal entry.
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Answer 1

Here there are two Dr entries:

Date                    Particulars                            L/F            Debit              Credit

2nd Jan 2001     Cash A/C        Dr                                   1800

                           Bad Debts A/C   Dr                               4200

                                    to A & Co.                                                            6000

Explanation: We write of the remaining debt as Bad Debt and Credit the party with full settlement