Charter Services Sells a Service Plan for Commercial Computer Maintenance $$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

question 109

Essay

Charter Services sells a service plan for commercial computer maintenance.The price is $1,200 per year,paid in advance.On December 1,2013,Charter sells a service plan to a new customer for cash.Please provide the journal entry to record the adjustment needed on December 31,2013.
$$\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$$

---

Definitions:

Uncollectible Accounts

Accounts receivable that are considered to be uncollectible and represent losses to the company, often written off as bad debt.

Bad Debts Expense

Bad Debts Expense represents the estimated amount of receivables that a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables reported on the balance sheet by the amount expected not to be collected.

Past Due Time

Past Due Time refers to the period that has elapsed after the official due date of a payment or obligation, signaling a delay in payment.