Aylmer Company is analyzing its accounts receivable for purposes of preparing its financial report for the year ended December 31, 2020. The company uses the aging method to estimate bad debts. During this analysis, Aylmer discovered that staff had written off a $53,000 account in 2020 even though the company had received information about the bankruptcy of the client in late 2019. 

The company has already recorded bad debts expense for 2020, but the general ledger for the year has not yet been closed. The following table provides information relating to Aylmer’s accounts receivables just prior to the discovery of the $53,000 error:

Required:

Record any adjusting journal entries necessary to correct the error in Aylmer’s accounts receivable.

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Accounts receivable gross Allowance for doubtful accounts Accounts receivable-net Bad debts expense 2019 $2,240,000 (123,000) $2,117,000 $ 225,000 2020 $2,460,000 (145,000) $2,315,000 $ 236,000