E6.9 (LO 3) (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Estefan Inc. shows the following balances.

Dr. Cr.

Accounts Receivable $80,000 Allowance for Doubtful Accounts 1,750 Sales Revenue $580,000 Instructions Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of

(a) 4% of gross accounts receivable and

(b) 5% of gross accounts receivable, and the Allowance for Doubtful accounts has a $1,700 credit balance.