$2$

Part $2$ of $3$

Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms $\frac{n}{60}.$ The balance of each account receivable is aged on the basis of three time periods as follows: $(1)$ not yet due, $(2)$ up to one year past due, and $(3)$ more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year$-$end due to uncollectibility is $($a$)4$ percent, $($b$)10$ percent, and $($c$)29$ percent, respectively.

At December $31,2022($end of the current accounting year$),$ the Accounts Receivable balance was $$49,800$ and the Allowance for Doubtful Accounts balance was $$990($credit$).$ In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December $31,2022,$ follow:

$\backslash$table$[[$Date$,$Explanation,Debit,CreditBalance$],[\frac{03}{02}\frac{?}{2020},$Sale,$5,500,,5,500],[\frac{04}{15}\frac{?}{2020},$Collection,,$5,500,0],[\frac{09}{01}\frac{?}{2021},-$ Sale,$9,000,,9,000],[\frac{10}{15}\frac{?}{2021},$Collection,,$4,900,4,100],[\frac{02}{01}\frac{?}{2022},$Sale,$21,000,,25,100],[\frac{03}{01}\frac{?}{2022},-$ Collection,,$5,500,19,600],[\frac{12}{31}\frac{?}{2022},-$ Sale,$3,200,,22,800]]$

T$.$ Thomas$-$Account Receivable

Date Explanation Debit CreditBalance $\frac{12}{30}\frac{?}{2022}$ Sale $4,700,4,700$

P$6-3$ Part $3$

$3.$ Prepare the adjusting entry for bad debt expense at December $31,2022.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

$1$

Record the adjusting entry for bad debt expense at December $31,2022.$

Note: Enter debits before credits.

$\backslash$table$[[$Transaction$,$General Journal,Debit,Credit$],[1.,,,],[,,,],[,,,],[,,,],[,,,]]$