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For 2012, your firm sees that it has significantly underestimated bad debts. As of December 31, the Allowance for Doubtful Accounts has a debit balance
For 2012, your firm sees that it has significantly underestimated bad debts. As of December 31, the Allowance for Doubtful Accounts has a debit balance of $2,000, Accounts Receivable has a balance of $45,000, and management has estimated bad debt at 10% of Accounts Receivable, or $4,500. Which of the following transactions should be recorded in order to correct your balances?
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