Question
At December 31, 2021, the company reported the following: Total sales for 2021: $620,000 Accounts receivable at Dec. 31, 2021: $190,000 Allowance for Doubtful Accounts
At December 31, 2021, the company reported the following: Total sales for 2021: $620,000 Accounts receivable at Dec. 31, 2021: $190,000 Allowance for Doubtful Accounts at Dec. 31, 2021: $1,500 credit The company uses the allowance method for recording its bad debts. Which of the following is the correct adjusting journal entry to record the company's bad debt expense, assuming that the company estimates bad debts to be 5% of accounts receivable?
a. DR Bad Debt Expense $9,500 CR Allowance for Doubtful Accounts $9,500
b. DR Bad Debt Expense $11,000 CR Allowance for Doubtful Accounts $11,000
c. DR Allowance for Doubtful Accounts $9,500 CR Bad Debt Expense $9,500
d. DR Bad Debt Expense $8,000 CR Allowance for Doubtful Accounts $8,000
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