How do I reverse a prepaid advertising entry that was a barter against a merch sale but the add never ran?
In this case, a company sold merchandise in exchange for advertising (a barter agreement). The merchandise was sold, and the A/R was reversed to prepaid advertising as the ad was to be run at a future date. The vendor has now defaulted, and I wish to write off the prepaid advertisement. To which account should I write it off against?
As the barter agreement was terminated due to non-compliance, the amount for the prepaid advertising would essentially become an accounts receivable. Therefore if the amount has been deemed uncollectable, then you would write it off to bad debt expense.
As the barter agreement was terminated due to non-compliance, the amount for the prepaid advertising would essentially become an accounts receivable. Therefore if the amount has been deemed uncollectable, then you would write it off to bad debt expense.
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