CHAPTER 13 ACCOUNTING 13-3. Assuming that in Exercise 13-2 the balance sheet approach is used, prepare a journalized adjusting entry for Bad Debts Expense. Based on an Accounts Receivable, an $8,000 balance in the Allowance account will be needed to cover bad debts. aging of .hiah ncan an A 11. 13-2. The following information is given: Sales Returns and Allowances Sales Accounts Receivable Dr. Cr. Dr. Cr. Dr. Cr. 500 110,000 30,000 Allowance for Doubtful Accounts Sales Discount Dr. Cr. 9,500 Dr. Cr. 5,000 Journalize the adjusting entry on December 31, 20XX, for Bad Debts Expense, which is estimated to be 4% of net sales. The income statement approach is used