Palmer Company had an Accounts Receivable balance of $85,000 and an Allowance for Bad Debts balance of

Question:

Palmer Company had an Accounts Receivable balance of $85,000 and an Allowance for Bad Debts balance of $3,400 (credit) at the end of the year (before any adjusting entry). Credit sales for the year totaled $860,000. The accountant determined that 1% of this year’s credit sales will ultimately be uncollectible. Make the journal entry necessary to record bad debt expense for the year.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...