Eddie Corporation Uses the Allowance Method for Estimating Uncollectible Accounts

Essay

Eddie Corporation uses the allowance method for estimating uncollectible accounts. Required: Prepare entries to record the following transactions: $$\begin{array} { | l | l | } \hline \text { January 5 } & \begin{array} { l } \text { Sold merchandise to Tonya Holmes for } \$ 1,500 , \text { terms } n / 15 . \text { The merchandise } \\\text { sold cost } \$ 900 .\end{array} \\\hline \text { April 15 } & \text { Received } \$ 500 \text { from Tonya Holmes on account. } \\\hline \text { August 21 } & \begin{array} { l } \text { Wrote off as uncollectible the balance of the Tonya Holmes account when she } \\\text { declared bankruptcy. }\end{array} \\\hline \text { October 5 } & \begin{array} { l } \text { Received a cheque for } \$ 350 \text { from Tonya Holmes. No further collections are } \\\text { expected. }\end{array} \\\hline\end{array}$$