At December 31 of the current year, a company reported the following: Total sales for the current year: $980,000 includes $160,000 in cash salesAccounts receivable balance at Dec. 31, end of current year: $160,000Allowance for Doubtful Accounts balance at January 1, beginning of current year: $7,300Bad debts written off during the current year: $5,800.Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal 1.5% of credit sales:
What will be an ideal response?
| Dec. 31 | Bad Debts Expense................................................ | 12,300 | ? |
| ? | Allowance for Doubtful Accounts*.................. | ? | 12,300 |
| ? | *($980,000 - $160,000) * .015 | ? | ? |
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