Healthy Lawn Maintenance Company Started a Lawn Services Business on January

Healthy Lawn Maintenance Company started a lawn services business on January 1, 2013. It sends invoices to its customers for lawn maintenance services at the end of each month, and expects the customer to pay within 30 days. During 2013, Healthy Lawn Maintenance billed its customers a total of $2,000,000 for services rendered during the year. It made journal entries at the end of each month.

Healthy Lawn Maintenance deems uncollectible any customer account not paid after six months. This means that every accounting period, Healthy Lawn Maintenance ascertains which accounts remained uncollected for six months, and treats these customer accounts as uncollectible by writing them off. If, during 2013, Healthy Lawn Maintenance identified accounts of specific customers totaling $20,000 with unpaid balances for six months and wrote them off, the journal entry would be as follows:

A) Bad Debt Expenses . . . . . . . . . . . . . . . . . . . 20,000
Accounts Receivable—gross . . . . . . .. . 20,000
B) Bad Debt Expenses . . . . . . . . . . . . . . . . . .20,000
Accounts Receivable—specific accounts . . . . 20,000
C) Allowance for Uncollectibles . . . .. . . .. . .. . .. 20,000
Accounts Receivable—specific accounts . . . . 20,000
D) Allowance for Uncollectibles . . . . . . . . . . . . . 20,000
Accounts Receivable—gross . . . . . . . . . . 20,000
E) Allowance for Uncollectibles . . . . . . . . . . . . . .20,000
Bad Debt Expenses . . . . . . . . . . . . . . 20,000