Final answer:
The question seeks a journal entry for adjusting bad debts in Highland Company's financial records, but specific amounts cannot be determined without further information, such as the percentage of sales that will become uncollectible.
Step-by-step explanation:
The question pertains to the journal entry needed to adjust for bad debts in a company's financial records. Highland Company has an accounts receivable balance and a credit balance in the Allowance for Bad Debts before the adjustment. The student is required to make an adjusting journal entry to account for the estimated bad debts according to the percentage of sales method or any other pertinent information provided. The general entry for recording bad debts would typically involve debiting Bad Debts Expense and crediting Allowance for Bad Debts. However, the specific amounts to be used in the journal entry cannot be derived from the provided details.