Answer:
Bad Debt Expense for 2020: $21,300
Explanation:
During 2020, when wrote of accounts, the following entry was made:
Debit Allowance for Doubtful Accounts $21,600
Credit Accounts Receivable $21,600
When collected on accounts previously written of:
Debit Accounts Receivable $6,300
Credit Allowance for Doubtful Accounts $6,300
Debit Cash $6,300
Credit Accounts Receivable $6,300
At 12/31/20, before adjusting, the balance of Allowance for Doubtful Accounts was credit: $30,000 - $21,600 + $6,300 = $14,700
Bad debts was estimated: 5% x $720,000 = $36,000
Bad Debt Expense for 2020 for adjusting entry:
$36,000 - $14,700 = $21,300
