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A customer has to pay long due debt balance of Dhs.175,0/-.Finally customer negotiated to Pay only Dhs.150,0/-as full and final settlement and company agreed it.Before company kept Dhs.10,0/-as Bad debts provision for the same due?Company receive the money(Dhs.150,0) as bank transfer?What are the journal?
Dr. Bank 1500 AED
Dr.Provision for Bad Bebt 100 AED
Dr. Bad Debts(Expense) 150 AED
Cr. Debtor(Customer) 1750 AED
Journal Entry;
Bank - Debited1500, Provision for Doubtful Debt100 Debit and Bad Debts150 Debit and
Customer - Credited1750.