Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $117,000, and it estimates that 6% 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 $1,989 credit balance before the adjustment. (b) a $585 debit balance before the adjustment.

Journal entry worksheet