Question 1 Partially correct Mark 8.00 out of 12.00 Flag question Credit Losses Based on Accounts Receivable At December 31, Rhine Company had a balance of $307,000 in its Accounts Receivable account and a credit balance of $2,800 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $310,600 in debit balances and $3,600 in credit balances. The company has aged its accounts as follows: Current $262,000 0-60 days past due 28,000 61-180 days past due 11,200 Over 180 days past due 9,400 $310,600 In the past, the company has experienced credit losses as follows: two percent of current balances, six percent of balances 0-60 days past due, 15 percent of balances 61-180 days past due, and 30 percent of balances more than six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable. Required a. Prepare the adjusting journal entry to record the provision for credit losses for the year. b. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts appear on the December 31 balance sheet. a. General Journal Date Description Dec.31 Bad Debts Expense Allowance for Doubtful Accounts record allfoodit lacere Debit 48,600 X Credit 0 48,600 x In the past, the company has experienced credit losses as follows: two percent of current balances, six percent of balances 0-60 days past due, 15 percent of balances 61-180 days past due, and 30 percent of balances more than six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable. Required a. Prepare the adjusting journal entry to record the provision for credit losses for the year. b. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts appear on the December 31 balance sheet. Credit General Journal Date Description Dec.31 Bad Debts Expense Allowance for Doubtful Accounts To record allowance for credit losses. Debit 48,600 X 48,600 x b. Current Assets: Accounts Receivable Less: Allowance for Doubtful Accounts 310,600 $ Current Liabilities: Customers' Overpayments $ 3,600 Check