1. Our company uses the aging of accounts receivable allowance method. As of December 31, 20X2:

• Accounts Receivable = $50,000
• Allowance for Doubtful Accounts balance = $2,500.

You use the aging of accounts receivable method to estimate how much of Accounts Receivable balance is uncollectible. You determine the dollar amount is $5,000.

On December 31, 20X2, you prepare the adjusting entry for the Allowance for Doubtful Accounts before preparing financial statements for the year.

The required adjustment to the Allowance for Doubtful Accounts is?

2. On October 31, our company accepts a note receivable for $10,000 at 6% for 90 days from Fabulous Gym in exchange for a cash loan. The journal entry was made.

On December 31, you prepare an adjusting entry to record the accrual of interest for 60 days. The dollar amount of Interest Revenue account is?

3. Our company uses the percent of sales allowance method.

• On December 31, 20X2, our company had $100,000 of credit sales, including a $50 sale to Henry Sobak. We prepared financial statements as of that date.
• On March 5, 20X3, Henry Sobak did not pay his credit balance when it was due and our company wrote his $50 debt off as uncollectible.

As the accountant, when do you record Bad Expense account in our journal entry?

Group of answer choices

December 31, 20X2 as an adjusting entry before preparing financial statements

On March 5, 20X3 when Henry Sobak defaults on repaying his $50 debt and it is deemed uncollectibl