Answer:
d. Debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200
Explanation:
allowance balance 2,300 debit
estimated uncollectible accounts 31,900 credit
adjustment needed 34,200 credit
We need to adjust the allowance to our estimated uncollectible account. Currently, it has 2,300 debit balance. We need to increase it to 31,900
If we think it in two steps:
We need to credit by 2,300 to have zero balance,
and then 31,900 to reach the expected uncollectible amount
in total a credit for 34,200 needs to be done
<u>The adjusting entry will be:</u>
bad debt expense 34,200 debit
allowance for doubtful accounts 34,200 credit
