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25 February, 10:22

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require aA. debit to Bad Debt Expense for $8,600. B. debit to Bad Debt Expense for $7,900. C. debit to Bad Debt Expense for $7,200. D. credit to Allowance for Doubtful Accounts for $700

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  1. 25 February, 13:11
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    C. debit to Bad Debt Expense for $7,200.

    Explanation:

    The company needs to reflects the total amount in the Allowance for Doubtful Accounts as credit balance, if the balance today it's $700, you need a new entry to adjust the balance with the Bad Debt Expense account.

    The entry must be a credit in Bad Debt Expense for $7,200 and the correspondent debit in the Allowance for Doubtful Accounts as credit.
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