Estimating Uncollectible Accounts Receivable as a Percentage of Credit Sales The 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.