Journal Entry for Bad Debts and Bad Debts Recovered (original) (raw)
Last Updated : 17 Apr, 2026
Bad Debts:
When the goods are sold to customers on credit, there can be a situation where a few of them fail to pay the amount due to them because of insolvency or any other reason, and then the amount that remains unrecovered is called Bad Debts.
**Journal Entry:
**Example:
- Amount due from Gaurav ₹5,000 is irrecoverable as he became insolvent.
- Gaurav, from whom the amount due was ₹5,000, became insolvent, and only 60 paisa in a rupee is recovered from his estate.
**Solution:
Bad Debts Recovered:
When the amount that is earlier written as bad debts, is now recovered, it is called bad debts recovered.
**Journal Entry:
**Example: A sum of ₹2,000 earlier written as bad debts is now recovered.
**Solution:
