Alpha Company uses an allowance method for recording bad debts.
On July 15, 2016 Alpha Company was advised of the bankruptcy of the
Broken Corporation and wrote off their $7,000 of accounts
receivable. Suddenly, on August 25, 2016 Broken won the Maryland
State Mega Millions. Without warning, on August 26, Alpha Company
received in full the payment for Broken's past debt. Use this
information to prepare the General Journal entries (without
explanation) for the August 26, 2016 event. If no entry is required
then write "No Entry Required."
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