Chapter 8 Part 1: Failing to record bad debt expense in the same period as the related revenue violates which principle? A contra-asset account, such as Allowance for Doubtful Accounts or Accumulated Depreciation, has a normal balance of a and causes total assets to Part 2: 1. The Corning Company uses the percent of sales method of accounting for uncollectible accounts receivable. At the beginning of the current year, the Allowance for Doubtful Accounts had normal balance of $8,000. The following transactions took place during the current year: Sept. 7 Corning Company determined that the $10,600 account receivable of the Helena Company was uncollectible and wrote it off. Nov. 9 Helena Company paid $6,000 of the amount owed to the Corning Company. Corning Company does not expect further collections from the Helena Company. Dec. 31 Corning Company estimates that 0.5% of its $1,900,000 of credit sales would be uncollectible. Prepare journal entries to record these transactions. 9/7 11/9 11/9 12/31 2. The current balance in the allowance for doubtful accounts is $525 debit. Accounts receivable at the end of the period are $75,000 and it is estimated that 3% of accounts receivable will be uncollectible. Journalize the necessary adjusting entry using the aging of accounts receivable method. 12/31 Part 3: On September 1, 2021, a company loans $48,000 to a customer by issuing a 9% 6-month note receivable. Prepare the journal entries to issue the note on 9/1/21, accrue interest at year end on 12/31/21, and receive payment of interest and principal on the note on 3/1/22. 9/1/21 12/31/21 3/1/22 3/1/22