DETERMINING BAD DEBT EXPENSE USING THE AGING METHOD At the beginning of the year, Lennon Electronics had an accounts receivable balance of

$29,800 and a balance in the allowance for doubtful accounts of $2,425 (credit). During the year, Lennon had credit sales of $752,693, collected accounts receivable in the amount of $653,800, wrote off $20,400 of accounts receivable, and had the following data for accounts receivable at the end of the period:

Accounts Receivable Age Amount Proportion Expected to Default Current $22,700 0.01 1–15 days past due 8,600 0.04 16–45 days past due 4,900 0.09 46–90 days past due 3,200 0.17 Over 90 days past due 2,100 0.30

$41,500 Required:

. Determine the desired postadjustment balance in allowance for doubtful accounts.

. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted.

. Compute bad debt expense.

. Prepare the adjusting entry to record bad debt expense.