7-3. Using the following information, calculate the bad debt adjustment and the net accounts receivable. Then record the adjustment in a journal entry for Accounts Receivable. Suppose that the Farmers determined that accounts receivable at the end of 20x4 were $10,800, Steve and Chris decide to be conservative and adjust their account receivable for bad debts. They decide to use an estimate of.5 percent of the accounts receivable amount as the percentage of bad debts. Accounts receivable at the end of 20x3 was $12,500