Answer
The company should account for the collection of the specific accounts previously written off as noncollectable as follows:
1. Collection of accounts by debiting Cash and crediting Accounts Receivable.
2. Reinstatement of accounts by debiting Accounts Receivable and crediting Allowance for Doubtful Accounts.
Work Step by Step
The first step reestablishes the previously write off debts while the second settles the reinstated amounts.
