Lorraine Company's Accounts Receivable Account has a debit balance of $3,600,000, and the Allowance for Doubtful...

Transcribed Image Text:

Lorraine Company's Accounts Receivable Account has a debit balance of $3,600,000, and the Allowance for Doubtful Accounts has a debit balance of $8,000 at the end of the year before adjustment. An analysis of their customers' accounts estimates that 2% of year end account receivable will be uncollectible. The adjusting journal entry for doubtful accounts will include: A) Debit Bad Debts Expense $652,000 B) Debit Bad Debts Expense $80,000 C) Credit Allowance for Doubtful Accounts, $64,000 D) Credit Allowance for Doubtful Accounts, $72,000 Lorraine Company's Accounts Receivable Account has a debit balance of $3,600,000, and the Allowance for Doubtful Accounts has a debit balance of $8,000 at the end of the year before adjustment. An analysis of their customers' accounts estimates that 2% of year end account receivable will be uncollectible. The adjusting journal entry for doubtful accounts will include: A) Debit Bad Debts Expense $652,000 B) Debit Bad Debts Expense $80,000 C) Credit Allowance for Doubtful Accounts, $64,000 D) Credit Allowance for Doubtful Accounts, $72,000

Answer rating: 100% (QA)

The Adjusting Entry is as follows Journal Entries Date A... View the full answer