On december 31, 2019, novak corp. estimated that 4% of its net accounts receivable of $414,400 will become uncollectible. the company recorded this amount as an addition to allowance for doubtful accounts. the allowance account had a zero balance before adjustment on december 31, 2019. on may 11, 2020, novak corp. determined that the jeff shoemaker account was uncollectible and wrote off $2,072. on june 12, 2020, shoemaker paid the amount previously written off.
prepare the journal entries on december 31, 2019, may 11, 2020, and june 12, 2020.

bad debt expense                    1,656 debit

allowance for doubtful accounts           1,656 credit

--to record bad debt expense expected--

allowance for doubtful accounts   2,072 debit

            accounts receivable                  2,072 credit

--to record Shoemaker account's write-off--

accounts receivables   2,072 debit

allowance for doubtful accounts   2,072 credit

--to record recovery from Shoemaker--

cash                                 2,072 debit

     accounts receivables              2,072 credit

--to record collection from Shoemaker--

Explanation:

expected uncollected

414,400  x  4%  = 1,656

When doing a write-off the company will debit the allowance and decrease the Account Receivables for the customer write-off account.

If latter the account is recovered, the company will reverse the write-off entry. Then, proceed to record the collection like a normal account.

d. low interest rates