Crestline Tools uses the direct write-off method for uncollectible accounts.
| Date | Event |
|---|
| March 12, 2026 | Determined that the $1,500 account of a customer was uncollectible and wrote it off. |
| August 5, 2026 | The customer unexpectedly paid the $1,500 in full. |
Required: Prepare the March 12 write-off and the two August 5 entries for the recovery (reinstate the account, then record the collection). Under the direct write-off method, the write-off is charged to Bad Debt Expense.