Sandhill Company reports the following financial information before adjustments. Dr. Cr. Accounts receivable 78,000 Allowance for doubtful accounts 500 Sales revenue (all on credit) 710,000 Sales returns and allowances 36,000.
Prepare the journal entry to record Bad Debt Expense assuming Sandhill Company estimates the necessary allowance for doubtful accounts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,570 debit balance