The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense
The company's management estimates that 2% of net credit sales will be uncollectible for the year 2017. Net credit sales for the year were $250,000. Prepare the journal entry to record the bad debts expense on December 31, 2017.
What will be an ideal response
Bad Debts Expense 5,000
Allowance for Bad Debts 5,000
Bad Debts Expense: $250,000 x .02
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