Chapter 9, Problem 9.8E

Bad Debt Expense, Percentage of Accounts Receivable, Journal Entry. Using the information provided in E9-7, prepare the journal entries required to record the provision for bad debts for the current year assuming the following.

Required

Klug estimates its bad debt expense as 4% of ending accounts receivable. For purposes of part (a) assume that there is a $25,000 credit balance in the allowance account before making any year-end adjustments to this account. For purposes of part (b), assume that there is a $25,000 debit balance in the allowance account before making any year-end adjustments to this account.