USA Dividend from bankrupted customer

[Alex Fujita]

Hi
I really need your help on this.
Our customer filed bankruptcy and we have uncorrectable sales amount of 15k. There is about 12k that we spent for our lawyer to get the 15k
At the end we received about $800.00 that they called dividend. But we were unsuccessful to get our 15k from the bankrupted customer.
The question is that this $800.00 goes to “other income” ? Or can we reduce our expense to the lawyer ? What is the correct recognition?
Appreciate your help on this.
thank you,

Alex

 

[kirby]

Did you start collection effort after the customer notified you of the bankruptcy?

 

[Alex Fujita]

Did you start collection effort after the customer notified you of the bankruptcy?

Yes. We made effort to correct the 15K but no result. Hence we passed the matter to our lawyer for the correction. After several attempt by lawyer we recently received $800.00 dividend from the bankrupted customer.
can we record to reduce our uncorrectable AR or reduce the expense to legal fees? Or is this other income?
Appreciate it for advice.

thank you,
Alex,

 

[kirby]

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