Prepare the adjusting journal entry

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Reference no: EM131024850

Hirdt 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.

(a) Prepare the adjusting journal entry to record bad debt expense for the year.

(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.

Reference no: EM131024850

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