Question

An aging of a company's accounts receivable indicates that $8500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $2700 credit balance, the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $5800. debit to Bad Debt Expense for $8500. debit to Bad Debt Expense for $5800. credit to Allowance for Doubtful Accounts for $8500.

Answer 1

Answer:

debit to Bad Debt Expense for $5800

Explanation:

Accounts receivable estimated as uncollectible = $8500

Allowance for Doubtful Accounts = $2700

Additional allowance for Doubtful debts required = $8500 - $2700

                                                                                  = $5800

The adjustment to record bad debts for the period will be

Debit Bad debt expense   $5800

Credit Allowance for Doubtful Accounts  $5800

The right option is debit to Bad Debt Expense for $5800