Mazie Supply Company uses the percent of accounts receivable method. On December $31,$ it has outstanding accounts receivable of

$$135,000,$ 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 $$2,295$ credit balance before the adjustment.

$($b$)$ a $$675$ debit balance before the adjustment.

Journal entry worksheet

Prepare the year$-$end adjusting entry to record bad debts expense under the

assumption that the Allowance for Doubtful Accounts has a $$2,295$ credit

balance before the adjustment.

Note: Enter debits before credits.