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21 January, 16:10

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $4,937.

If Allowance for Doubtful Accounts has a $1,250 credit balance, the adjustment to record the bad debt expense for the period will require a:

a. debit to Bad Debt Expense for $4,937.

b. debit to Allowance for Doubtful Accounts for $3,687.

c. debit to Bad Debt Expense for $3,687.

d. credit to Allowance for Doubtful Accounts for $4,937.

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  1. 21 January, 18:19
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    c. debit to Bad Debt Expense for $3,687.

    Explanation:

    The journal entry to record the bad debt expense is shown below:

    Bad debt expense A/c Dr $3,687

    To Allowance for doubtful debts $3,687

    (Being bad debt expense is recorded)

    The computation is shown below:

    = Estimation of the uncollectible receivable - credit balance in allowance for doubtful debts

    = $4,937 - $1,250

    = $3,687
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