Question
Byrd Co.uses the percentage-of-receivables basis to record bad debt expense and concludes that2% of accounts receivable will become uncollectible. Accounts receivable are $400,000at the end
Byrd Co.uses the percentage-of-receivables basis to record bad debt expense and concludes that2% of accounts receivable will become uncollectible. Accounts receivable are $400,000at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,800.
(a)Prepare the adjusting journal entry to record bad debt expense for the year.(b)If the allowance for doubtful accounts had a debit balance of $900instead of a credit balance of $2,800, prepare the adjusting journal entry for bad debt expense.
(b)If the allowance for doubtful accounts had a debit balance of $900instead of a credit balance of $2,800, prepare the adjusting journal entry for bad debt expense.
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