Question: Nice Firm uses the balance sheet method to estimate its bad debt expenses. In 2020, they had $200,000 outstanding AR and estimates that 10% of

Nice Firm uses the balance sheet method to estimate its bad debt expenses. In 2020, they had $200,000 outstanding AR and estimates that 10% of all outstanding AR will be uncollectible. On Dec 31^st2020, prior to adjusting entries, the allowance for doubtful accounts had a balance of $3,000

Provide the adjusting entries for bad debt expense on Dec 31^st2020.

On Jan 10^th2020, Nice Firm writes of $2,000 worth of AR as bad debt. Provide the relevant journal entries.

On Feb 10^th, Nice Firm collects $1,000 from an invoice that was previously written off. Provide the relevant journal entries.

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