Required information P6-3 (Algo) Determining Bad Debt Expense Based on Aging Analysis LO6-2 [The following information applies to the questions displayed below.] Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n/60. The balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectibility is (a) 10 percent, (b) 10 percent, and (c) 35 percent, respectively. At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $50,100 and the Allowance for Doubtful Accounts balance was $1,110 (credit). In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December 31, 2019, follow: Date B. Brown-Account Receivable Explanation 03/11/2018 Sale Debit 13,200 Credit Balance 13,200 06/30/2018 Collection 3,500 9,700 01/31/2019 Collection 4,400 5,300 D. Donalds-Account Receivable Date Explanation 02/28/2019 04/15/2019 11/30/2019 Sale Collection Collection Debit 21,300 Credit Balance 21,300 8,300 13,000 4,600 8,400 N. Napier-Account Receivable Date Explanation 11/30/2019 12/15/2019 Sale Collection Debit 9,000 Credit Balance 9,000 1,300 7,700 S. Strothers-Account Receivable Date Explanation Debit Credit Balance 03/02/2017 Sale 5,000 5,000 04/15/2017 Collection 5,000 0 09/01/2018 Sale 10,500 10,500 10/15/2018 Collection 3,900 6,600 02/01/2019 Sale 21,900 28,500 03/01/2019 12/31/2019 Collection 7,200 21,300 Sale 3,000 24,300 Date 12/30/2019 T. Thomas-Account Receivable Explanation Sale Debit 4,400 Credit Balance 4,400 6 3. Prepare the adjusting entry for bad debt expense at December 31, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjusting entry for bad debt expense at December 31, 2019. Note: Enter debits before credits. Transaction A General Journal Debit Credit Record entry Clear entry View general journal