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Receivables and Allowance for Doubtful Accounts(Notes)
6 Months Ended
Jun. 30, 2020
Receivables and Allowance for Doubtful Accounts [Abstract]  
Receivables and Allowance for Doubtful Accounts [Text Block] Receivables and Allowance for Doubtful Accounts
Installment sales receivables consist primarily of receivables due from customers for the sale of merchandise in our retail installment stores. Installment sales receivable associated with the sale of merchandise at our Get It Now and Home Choice stores generally consist of the sales price of the merchandise purchased and any additional fees for services the customer has chosen, less the customer’s down payment. No interest is accrued and interest income is recognized each time a customer makes a payment, generally on a monthly basis. Interest paid on installment agreements for the six months ended June 30, 2020 was $5.6 million.
Trade and notes receivables consist primarily of amounts owed from our franchisees for inventory purchases, earned royalties and other obligations; and other corporate related receivables. Credit is extended based on an evaluation of a franchisee’s financial condition and collateral is generally not required. Trade receivables are generally due within 30 days.
Receivables consist of the following:
(In thousands)June 30, 2020December 31, 2019
Installment sales receivables$56,687  $56,370  
Trade and notes receivables28,534  33,354  
Total receivables85,221  89,724  
Less allowance for doubtful accounts(8,238) (5,601) 
Total receivables, net of allowance for doubtful accounts$76,983  $84,123  
We have established an allowance for doubtful accounts for our installment notes receivable. Our policy for determining the allowance is primarily based on historical loss experience, as well as the results of management’s review and analysis of the payment and collection of the installment notes receivable within the previous year. We believe our allowance is adequate to absorb all expected losses. Our policy is to charge off installment notes receivable that are 120 days or more past due. Charge-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previously charged off balances are applied as an increase to the allowance for doubtful accounts.
The allowance for our Franchising trade and note receivables is determined by considering a number of factors, including the length of time receivables are past due, previous loss history, the franchisee’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Trade receivables that are more than 90 days past due are either written-off or fully reserved in our allowance for doubtful accounts. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts.
The allowance for doubtful accounts related to trade and notes receivable was $1.4 million and $1.5 million at June 30, 2020 and December 31, 2019, respectively. The allowance for doubtful accounts related to installment sales receivable was $6.8 million and $4.1 million at June 30, 2020 and December 31, 2019, respectively.
Changes in our allowance for doubtful accounts are as follows: 
(In thousands)June 30, 2020
Beginning allowance for doubtful accounts$5,601  
Bad debt expense (1)
7,900  
Accounts written off(5,620) 
Recoveries357  
 Ending allowance for doubtful accounts$8,238  
(1) Uncollectible installment payments, franchisee obligations, and other corporate receivables are recognized in other store operating expenses in our condensed consolidated financial statements.