Uncollectable Accounts-Percentage of Receivables

A business estimates the amount of uncollectable accounts using the percentage of receivables method. After aging the accounts, it is estimated that $3935 will not be collected. Record the end of period adjusting entry on December 31,in general journal form, for the estimated uncollectable accounts. Assume the following independent conditions existed prior to the adjustment;

1Allowance for bad debt has a credit balance of $245.

2Allowance for bad debt has a debit balance of $560.