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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4545
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I need to have an entry drafted off bad loan and

Customer Question

I need to have an entry drafted for write off bad loan and the reserve account
Submitted: 1 year ago.
Category: Finance
Customer: replied 1 year ago.
I can send the schedule over I just need an entry drafted
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Friend,Hello and welcome. Thank you for providing an opportunity to assist you.From what I understand from your question, you have a bad debt and you want to write it off from your reserve. You require a Journal Entry for this. Please correct me if I am wrong.It would be as under: 1. It is not proper to write it off directly from reserve. So, you will first create a "Allowance". The Journal Entry would be as under: Reserves A/c DRTO Allowance of Bad Debts A/c (This will reduce the Reserves and create a Credit Balance in the Bad Debts Allowance Account) 2. The next step would be as under: Allowance of Bad Debt A/c DRTO Loan/ Amount Receivable A/c (This will take the amount / utilize the amount from the allowance account to effect a write off) I am sure this would help. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,