1. The Rock has credit sales of $475,000 during 2019 and estimates at the end of 2019 that 2% of these credit sales will eventually default. Also, during 2019 a customer defaults on a $1,800 balance related to goods purchased in 2019.

   Required:

   1. Prepare the journal entry to record the defaulted balance.

   	Allowance for Doubtful Accounts
   	Accounts Receivable
   	Record write-off of defaulted account

   1. Under the allowance method bad debt expense is recognized in the period of sale (i.e., matched to the period the revenue is recognized). Bad debt expense is not recognized at the time a specific account is written off as uncollectible.

   2. Prepare the adjusting entry to record the bad debt expense for 2019.

   	Bad Debt Expense
   	Allowance for Doubtful Accounts
   	Record adjusting entry for bad debt expense estimate

   2. Under the allowance method bad debt expense is recognized in the period of sale (i.e., matched to the period the revenue is recognized). Bad debt expense is not recognized at the time a specific account is written off as uncollectible.