Answer:
The journal entry is shown below:
Explanation:
According to the scenario, the journal entry are as follows:
(a). Journal entry
Bad Debt expenses A/c Dr $2,474
To Allowance for Doubtful debts A/c $2,474
(Being the bad debt expense is recorded)
Computation = ($145,600 × 4%) - $3,350 = $5,824 - $3,350
= $2,474
(b). Journal entry
Bad Debt expenses A/c Dr $7,244
To Allowance for Doubtful debts A/c $7,244
(Being the bad debt expense is recorded)
Computation = ($145,600 × 4%) + $1,420 = $5,824 +1,420
= $7,244
