An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $4,937.

If Allowance for Doubtful Accounts has a $1,250 credit balance, the adjustment to record the bad debt expense for the period will require a:

a. debit to Bad Debt Expense for $4,937.

b. debit to Allowance for Doubtful Accounts for $3,687.

c. debit to Bad Debt Expense for $3,687.

d. credit to Allowance for Doubtful Accounts for $4,937.

Question

Business

Aleena Gilbert

2 August, 15:15

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $4,937.

If Allowance for Doubtful Accounts has a $1,250 credit balance, the adjustment to record the bad debt expense for the period will require a:

a. debit to Bad Debt Expense for $4,937.

b. debit to Allowance for Doubtful Accounts for $3,687.

c. debit to Bad Debt Expense for $3,687.

d. credit to Allowance for Doubtful Accounts for $4,937.

+2

Answers (1)

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Patton · Answer 1

c. debit to Bad Debt Expense for $3,687.

Explanation:

The journal entry to record the bad debt expense is shown below:

Bad debt expense A/c Dr $3,687

To Allowance for doubtful debts $3,687

(Being bad debt expense is recorded)

The computation is shown below:

= Estimation of the uncollectible receivable - credit balance in allowance for doubtful debts

= $4,937 - $1,250

= $3,687