Exercise 9-3 Direct write-off method
Diablo Company applies the direct write-off method in accounting for uncollectible accounts.
June 11 Diablo determines that it cannot collect $8,600 of its accounts receivable from its customer Chaffey Company.
June 29 Chaffey Company unexpectedly pays its account in full to Diablo Company. Diablo records its recovery of this bad debt. Prepare journal entries to record the above selected transactions of Diablo.