Entity records bad debt expense and create allowance based on estimation. When the chances of recovery get very low, entity decides to write off the bad debt. But as all the calculation depends upon the estimation, the customer may pay the invoices amount later in case its financial position gets improved.
In this case, the write-off entry is reversed and then the payment entry is passed in the journal general.
Recovery of Bad Debts General Journal
| Debit | Credit | |
| Accounts Receivable | ABC | |
| Allowance for doubtful debt | ABC | |
| Cash | DEF | |
| Accounts Receivable | DEF |