Question

An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $4,705. If Allowance for Doubtful Accounts has a $1,057 credit balance, the adjustment to record the bad debt expense for the period will require a

Answer 1

Debit to bad debt expense for $3,648

Step-by-step explanation:

This is because the company needs to show the total amount in the Allowance for doubtful accounts as credit balance. It means that if for instance the balance today is $1,057 you'll need a new entry to adjust the balance with the bad debt.

It means that the entry must be a debit in bad debt expense for $3,648 while the corresponding credit goes to allowance for doubtful accounts.