12/31/Y1 balances of Accounts Receivable and Allowance for Doubtful Accounts are $1,000,000 and $100,000, respectively. Year 2...
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Question:
12/31/Y1 balances of Accounts Receivable and Allowance for Doubtful Accounts are $1,000,000 and $100,000, respectively.
Year 2 sales are $3,000,000, of which $2,200,000 are on account.
Year 2 collections are $2,700,000.
Year 2 write-offs are $25,000; reinstatements of previously written off accounts are $7,000.
Instructions: Prepare the 12/31/Y2 adjusting journal entry to record bad debt expense estimated at 20% of accounts receivable. In the textbox, write your journal entry out in the format provided in this example: "Debit Cash, $100; credit Common Stock, $100." Do not compose complete sentences. Partial answers are not accepted.
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