E6-12 Recording and Reporting a Bad Debt Estimate Using Aging Analysis L06-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due $50,700, (2) up to 180 days past due, $14,100, and (3) more than 180 days past dus. $4,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 13 percent, and (3) 30 percent, respectively. At December 31, end of the current year, the Allowance for Doubtful Accounts balance is $300 (credit) before the end-of-period adjusting entry is made." Required: 1. Prepare the appropriate bad debt expense adjusting journal entry for the current year. (If no entry required for a transaction/event, select "No journal entry required" in the first account field.) Answer complete and correct. No Credit Date December 31 General Journal Bad debt expense Allowance for doubtful accounts Debit 3,897 1 3,897 2. Show how the various accounts related to accounts receivable should be shown on the December 31 current year, balance sheet. (Amounts to be deducted should be indicated by a minus sign.) * Answer is complete but not entirely correct. CASILDA COMPANY Partial Balance sheet As of December 31 Accounts receivable Allowance for doubtful accounts 69.300 (3,897) Accounts receivable, net of allowance for doubtful accounts $ 65,403