On June 30 (the end of the period), Brown Company has a credit balance of $2,365 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $28,300. Journalize this recognition.

Question

Business

Manuel Strong

8 February, 20:08

On June 30 (the end of the period), Brown Company has a credit balance of $2,365 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $28,300. Journalize this recognition.

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Elsa Novak · Answer 1

Bad Debts Expense $ 25,935 (debit)

Allowance for Doubtful Debts $ 25, 935 (Credit)

Explanation:

Difference of $28,300 - $2365 = $ 25,935

As $ 2365 is already credited to allowance for doubtful debts it should be deducted from the balance to make the adjustment so the total remains the same.

Bad Debts Expense $ 25,935 (debit)

Allowance for Doubtful Debts $ 25, 935 (Credit)