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 $89,000, and it estimates that 5% 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 $1,513 credit balance before the adjustment. (b) a $445 debit balance before the adjustment