Allowance Method of Accounting for Bad Debts-Comparison of the Two Approaches Kandel Company had the following data available for 2016 (before making any adjustments): Required: 1. Prepare the journal entry to recognize bad debts under the following assumptions: (a) bad debts expense is expected to be 2% of net credit sales for the year. How does this entry affect the accounting equation? Date Feecback T Chack My Werk a) Multiply percentage uncollectable by net sales amount for expense. (b) Kandel expects it will not be able to collect 6% of the balance in accounts receivable at year-end. How does this entry affect the accounting equation? Feedback F Check My Werk 2. Assume instead that the balance in the allowance account is a $2,600 debit. How will this affect your answers to part (1)? a. Based on 2% of net credit sales: How does this entry affect the accounting equation