A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:?Debit CreditCash sales…………………………………………?$188,000Credit sales………………………………………?275,000Accounts receivable………………………………$76,000?Allowance for doubtful accounts…………………?1,000Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales.
What will be an ideal response?
| 1. | Bad Debts Expense | 6,875 |
| ? | Allowance for Doubtful Accounts | 6,875 |
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