Requirement 1. The T-accounts for Allowance for Bad Debts and Bad Debts Expense have been opened for you, assuming the accounts begin with a zero balance. Record the transactions in the general journal (omit explanations), and post to the two T-accounts. (Record debits first, then credits. Exclude explanations from journal entries. Abbreviations used: Adj. = Adjusting entry, Clos. = Closing entry, W/O = Write-off.)

Begin by recording the 2018 transactions in the general journal.

Dec. 31: Estimated that bad debts expense for the year was 22% of credit sales of $450,000 and recorded that amount as expense. The company uses the allowance method.