Question

On June 30 (the end of the period), Brown Company has a credit balance of $2,365 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $28,300.Journalize this recognition.

Answer 1

Bad Debts Expense $ 25,935 ( debit)

Allowance for Doubtful Debts $ 25, 935 (Credit)

Step-by-step explanation:

Difference of $28,300- $2365= $ 25,935

As $ 2365 is already credited to allowance for doubtful debts it should be deducted from the balance to make the adjustment so the total remains the same.

Bad Debts Expense $ 25,935 ( debit)

Allowance for Doubtful Debts $ 25, 935 (Credit)