Credit Losses Based on Credit Sales Lewis Company uses the allowance method for recording its expected credit losses, it estimates credit losses at 1% of credit sales which were 5910,000 during the year. On December 31, the Accounts Receivable balance was $116,000 and the Allowance for Doubtful Accounts had a credit balance of $11.200 before adjustment a. Prepare the adjusting entry to record the credit losses for the year