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Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $141,500, and it estimates that 5%
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $141,500, 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:
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(a) a $2,406 credit balance before the adjustment.
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(b) a $708 debit balance before the adjustment.
| No | Transaction | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | (a) | Bad debts expense | ||
| Allowance for doubtful accounts | ||||
| 2 | (b) | Bad debts expense | ||
| Allowance for doubtful accounts |
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