Exercise 7-13 (Algo) Percent of accounts receivable method LO P3 Mazie Supply Company uses the percent of accounts receivable method. On December 31 , it has outstanding accounts receivable of $135,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $2.304 credit balance before the adjustment. (b) a $678 debit balance before the adjustment. Journal entry worksheet 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Alowance for Doubtful Accounts has a $2,304 credit balance before the adjustment. Note1 Enter debits before credits. Exercise 7-13 (Algo) Percent of accounts receivable method LO P3 Mazie Supply Company uses the percent of accounts receivable method. On December 31 , it has outstanding accounts receivable of $135,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $2,304 credit balance before the adjustment. (b) a $678 debit balance before the adjustment. Journal entry worksheet Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $678 debit balance before the adjustment. Note: Enter debits before credits