Question: You are to determine the adjusting journal for bad debt expense using the listed information below for Crimson Inc.: Account receivable for Crimson Inc. at

You are to determine the adjusting journal for bad debt expense using the listed information below for Crimson Inc.:

Account receivable for Crimson Inc. at the end of December 31, 2018 totals $200,000. This balance is due to four customers not paying their bill by the end of the year. James owes $50,000; Fred owes $64,000; Bernie owes 36,000; and Terry owes $50,000. The probabilities of James not paying has been determined to be 20% and Fred, Bernie, and Terry were each assessed a 10% probability.

If the balance in the allowance for doubtful accounts has a debit balance of $10,000 then what would be the adjusting entry to needed to update Crimson Inc.s books?

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