Question

EquiFax Company estimates its uncollectible accounts based on an analysis of its receivables. On December 31, 2007, a junior accountant prepared the following aging schedule for the company's $88,000 in outstanding receivables.

Estimated Uncollectible Accounts

Age Interval                           Amount                      %                     Amount

Not due $58,650                       2%                   $1,173

1–30 days past due                $13,220                       4%                   $529

31–60 days past due              $8,930                         20%                 $1,786

61–90 days past due              $4,000                         30%                 $1,200

Over 90 days past due          $3,200                         50%                 $1,600

Total $88,000 $6,288

NOTE: The Allowance for Doubtful Accounts has no previous balance in 2007 as it’s the first year of its business operations.

1. Prepare the adjusting entry to record the company's estimate of uncollectible accounts on December 31, 2007.  

2. After completing the adjusting entry, prepare the journal entry to write off the following uncollectible accounts on August 4, 2008:

T. Donaldson $700

J. Kyle $450

D. Mize $1,000

3. J. Kyle decided to pay his account on October 31, 2008 after you have written off his balance. Please provide the adjusting journal entries to record that transaction.