Refer to the information in BE5–4. 

Data from in BE5-4

At the end of the first year of operations, Mayberry Advertising had accounts receivable of $20,000. Management of the company estimates that 10% of the accounts will not be collected. What adjusting entry would Mayberry Advertising record to establish Allowance for Uncollectible Accounts?

Determine the financial statement effects of the adjusting entry to allow for uncollectible accounts.