ESTIMATION AND RECORDING OF UNCOLLECTIBLE ACCOUNTS - PERCENTAGE OF CREDIT SALES RECEIVABLE METHOD Part 1 - In 2009, Vandolay reported $300,000 in sales. The company's allowance for doubtful accounts has an unadjusted credit balance of $12,000. Based on prior experience, management estimates that 2.5% of sales will result in bad debts. Prepare the required adjusting journal entry. Bad Debt Expense Allowance for Doubtful Accounts Part 2 - Assume instead that the company's allowance for doubtful accounts has an unadjusted debit balance of $400. Prepare the required adjusting journal entry. Bad Debt Expense Allowance for Doubtful Accounts 7-4