USA Help with journal entries for Accounts Receivables

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How would you preform the journal entries for a client that is disputing claiming a shortage, but are deducting that from their payment to us that is an accounts receivable. I am counter disputing as I have signed BOLs and proof, how do I write these entries, so that I can show the deduction, but also have the amount show as a payable for the future when repaid. If this is not the right place to ask this question sorry. Thank you for your help.
 

kirby

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You can use the allowance method in this way:
1. You bill client $1,000 for goods so you have a $1,000 A/R on the books
2. Client disputes bill. So estimate what part of the $1,000 can be collected
3. If only $400 is estimated to be collected then record the $600 this way: DR to Expense - Bad Debt expense for $600 and Cr to a new balance sheet acct under the A/R acct called "Allowance for Bad Debts' Credit $600
4. Now your balance sheet shows
A/R $1,000
Allowance for Bad Debts <,600>
Net A/R 400

When the issue is resolved you adjust the Allowance account
 

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