Question

Madhav a debtor from rupees 2000 become insolvent 40%amount was received from govt receiver

Answer 1

A journal entry is a record of the various business transactions in a company's accounting records.

• The correct journal entries will be -

Cash A/c Dr. 800

Bad Deb ts A/c Dr. 1200

To Madhav A/c 2000

( Being the amount received from Madhav)

P&L A/c Dr. 1200

To Bad Deb ts A/c 1200

( Being the amount adjusted)

Working Notes:

Total amount = 2000

Recovered = 40%

Thus, 40% of 2000

= 800