FINANCIAL ACCOUNTING>IC<
FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
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Chapter 8, Problem 8.5BE

Byrd Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $400,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,800.

  1. (a) Prepare the adjusting journal entry to record bad debt expense for the year.
  2. (b) If the allowance for doubtful accounts had a debit balance of $900 instead of a credit balance of $2,800, prepare the adjusting journal entry for bad debt expense.
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Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License