A Customer of Halifax Manufacturing Recently Filed for Bankruptcy Protection

question 89

Multiple Choice

A customer of Halifax Manufacturing recently filed for bankruptcy protection two months ago,leading Halifax's credit manager to conclude that the company would never collect the balance of $15,600 owed by the customer. Suppose that three months after filing bankruptcy,Halifax's customer paid its outstanding account balance.Which of the following journal entries would be made to record this transaction?

• A)Debit Cash and credit Bad Debt Expense for $15,600.
• B)Debit Cash and credit Accounts Receivable for $15,600.
• C)Debit Accounts Receivable and credit Allowance for Doubtful Accounts for $15,600;debit Cash and credit Accounts Receivable for $15,600.
• D)Debit Cash and credit Sales for $15,600.

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