Question: On 1st may 2021, provision for doubtful debts stands at $250,000 for Chloe's Diner. The accounts receivable on 31 March 2022 were $11,100,000. Total bad debt estimated to $850,000. It is required to write off the bad debts and create a provision equal to 5% of the receivables. Requirements:
1. Journalize all the required transactions.
2. Explain how you will post it in the financial statements.