1.

Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts.

2.

B.	Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

Allowance for Doubtful Accounts
Feb. 8		Jan. 1 Balance
Aug. 13		May 27
Dec. 31		Oct. 31
		Dec. 31 Adjusting Entry
Dec. 31 Unadjusted Balance		Dec. 31 Adj. Balance

Bad Debt Expense
Dec. 31 Adjusting Entry