Mazie Supply Company uses the percent of accounts receivable method. On December 31 , it has outstanding accounts receivable of $143,500, and it estimates that 4% 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 $2,440 credit balance before the adjustment. (b) a $718 debit balance before the adjustment. Journal entry worksheet 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $2,440 credit balance before the adjustment. Note: Enter debas before credits