Use an expense account type to record write offs so that bad debts are
tracked with all money leaving your company.
To do this task
Click the Account drop-down list and choose the expense account you have set up to
track bad debt.
If you use classes to track transactions, enter the appropriate class for the bad debt.
If you don't already have an account for this purpose, you can create a
new bad debt expense account now.
Click the Account drop-down list and choose the option to add a new account. You
might need to scroll up to find this option at the top of the list.
In the New Account window, select Expense as the account type.
Enter an account name such as "Bad Debt" or "Write
Offs." Optionally, you can add a description about this account and assign
a tax line.
In the Write Off Amount window, click OK to assign this write off.