Answer:
The entry to record bad debt expense:
Debit Bad debts expense $24,446
Credit Allowance for Doubtful Accounts $24,446
Explanation:
1. At December 31, 2020,
Bad debt are estimated: 11% x $204,600 = $22,506
Before adjusting, Allowance for Doubtful Accounts had a debit balance of $1,940. So Bad debt expense will be: $1,940 + $22,506 = $24,446
The adjustment to record Bad debt expense and Allowance for Doubtful Accounts:
Debit Bad debts expense $24,446
Credit Allowance for Doubtful Accounts $24,446