SP $7$ Serial Problem Business Solutions $($Algo$)$ LO P$1,$ P$2$

Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business

Solutions has total revenues of $$48,000$ during the first three months of $2022$ and that the Accounts Receivable balance on March $31,$

$2022,$ is $$22,867.$

Required:

$1$a$.$ Prepare the adjusting entry to record bad debts expense, which are estimated to be $1\%$ of total revenues on March $31,2022.$ There

is a zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

$1$b$.$ Prepare the adjusting entry to record bad debts expense, which are estimated to be $2\%$ of accounts receivable on March $31,2022.$

There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

Assume that Business Solutions's Accounts Receivable balance at June $30,2022,$ is $$20,750$ and that one account of $$96$ has been

written off against the Allowance for Doubtful Accounts since March $31,2022.$ If Rey uses the method in part $1b,$ what adjusting journal

entry is made to recognize bad debts expense on June $30,2022?$

Complete this question by entering your answers in the tabs below.

Req $2$

Prepare the adjusting entry to record bad debts expense, which are estimated to be $1\%$ of total revenues on March $31,2022.$ There is a

zero unadjusted balance in the Allowance for Doubtful Accounts at March $31.$

Journal entry worksheet

$1$

Record estimated bad debts.

Note: Enter debits before credits.