Zero Co. uses the allowance method of accounting for bad debts. Their Allowance for Doubtful Accounts account has a year-end debit balance, prior to adjustment, of $800. The bad debts are estimated at 5% of $160,000, the year-end accounts receivable. Prepare the year end adjusting journal entry for bad debt expense. Ida Date Accounts Debit Credit Zero Co. uses the allowance method of accounting for bad debts. Their Allowance for Doubtful Accounts has a year-end credit balance, prior to adjustment, of $650. The bad debts are estimated at 3% of $560,000, the net credit sales. Prepare the year end adjusting journal entry for bad debt expense. Date Accounts Debit Credit