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uses the percentage of receivables basis to record bad debts expense

BE8-5 Jaya Co. uses the percentage of receivables basis to record bad debts expense
and concludes that 2% of accounts receivable will become un collectible. Accounts receivable
are $500,000 atthe end of the year, and the allowance for doubtful accountshas  
a credit balance of $1,500.            
(a) Prepare the adjusting journal entry to record bad debts expense for the year.  
(b) If the allowance for doubtful accounts had a debit balance of $600 instead of a credit
balance of $1,500, prepare the adjusting journal entry for bad debts expense.

Apr 25 2018 View more View Less

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