WRITE-OFF OF UNCOLLECTIBLE ACCOUNTS
The Rock has credit sales of $650,000 during 2010 and estimates at the end of 2010 that 3 percent of these credit sales will eventually default. Also, during 2010 a customer defaults on a $1,225 balance related to goods purchased in 2009.
Required:
Prepare the journal entry to record the write-off of the defaulted $1,225 balance.