Mazie Supply Co$.$ uses the percent of accounts receivable method. On December $31,$ it has outstanding accounts i $$148,000,$ 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 D has:

$($a$)$ a $$2,516$ credit balance before the adjustment.

$($b$)$ a $$740$ debit balance before the adjustment.

Journal entry worksheet

$1$

$2$

Prepare the year$-$end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $$2,516$ credit balance before the adjustment.