Problem
Prepare all journal entries for 20 times 2 concerning the following data for a medical clinic that performs elective laser surgery that corrects vision. Such procedures are not coveted by third- party payers such as Blue Cross or Medicare. Consider the following balances of the medical clinic on December 31, 20X1: Gross Receivables from Individual Patients, $ 225,000 and Allowance for Doubtful Receivables, $ 50,000, which makes Net Receivables $ 175,000. During 20X2, total billings to individual patients were $ 2.5 million. Past experience indicated that 10 percentage of such individual billings would ultimately be uncollectible. Write-offs of receivables during 20X2 were $ 260,000.