Red Corporation incurred a $12,000 bad debt last year.Red Corporation also had an $8,000 long-term capital gain last year.Red's taxable income for last year was $28,000.During the current year,Red Corporation,unexpectedly,collected $5,000 on the debt.How should Red Corporation account for the $5,000 collection?

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The Answer of Red Corporation incurred a $12,000 bad debt last year.Red Corporation also had an $8,000 long-term capital gain last year.Red's taxable income for last year was $28,000.During the current year,Red Corporation,unexpectedly,collected $5,000 on the debt.How should Red Corporation account for the $5,000 collection?

Red Corporation Incurred a $12,000 Bad Debt Last Year