Chapter 5, Problem 5.7BE

To determine

Allowance for uncollectible accounts:

Allowance for uncollectible account is a contra asset account, whose normal balance is a credit balance. The amount of allowance for uncollectible account represents the amount of accounts receivable which are not expected to be collected.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. Estimated future uncollectible accounts receivable are known as bad debt expense.

To record: The adjustment entry in the books of Incorporation D for allowance for uncollectible accounts.