At December 31, 2018, the Accounts Receivable balance of Lexington Financial Software is $205,000. The Allowance for Bad Debts account has a $13,290 debit balance. Lexington Financial Software prepares the following aging schedule for its accounts receivable: (Click the icon to view the aging schedule.) Requirements 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018 2. Show how Lexington Financial Software will report its net accounts receivable on its December 31, 2018, balance sheet. Requirement 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018. Begin by determining the target balance of Allowance for Bad Debts by using the age of each account. Age of Accounts 1-30 31-60 61-90 Over 90 Total Days Days Days Days Balance Accounts Receivable $ $ 40,000 $ 20,000 90,000 0.1% 2.0% $ 55,000 8.0% Estimated percent uncollectible 50.0% Estimated total uncollectible Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Check your spelling carefully and do not abbreviate.) Date Accounts and Explanation Debit Credit Dec. 31 Show the T-account for the Allowance for Bad Debts at December 31, 2018. Allowance for Bad Debts Requirement 2. Show how Lexington Financial Software will report its net accounts receivable on its December 31, 2018, balance sheet. Balance Sheet (Partial): Current Assets