Write-Off of Uncollectible Accounts}

King Enterprises had 27 customers utilizing its financial planning services in 2018. Each customer paid King \(\$ 25,000\) for receiving King's assistance. King estimates that \(2 \%\) of its \(\$ 675,000\) credit sales in 2018 will be uncollectible. During 2019 , King wrote off \(\$ 2,700\) related to services performed in 2018 .

\section*{Required:}

1. Prepare the journal entry to record the defaulted balance.

2. Prepare the adjusting entry to record the bad debt expense for 2019 .

\section*{OBJECTIVE 4 Brief Exercise