record estimated bad debts assuming that allowance for doubtful accounts has a $12,500 credit balance. note…
record estimated bad debts assuming that allowance for doubtful accounts has a $12,500 credit balance. note: enter debits before credits. dates general journal debit credit december 31
Answer
Explanation:
Step1: Identify the accounts involved
The accounts involved are Bad - Debt Expense (to record the estimated uncollectible amount) and Allowance for Doubtful Accounts (to adjust the existing balance).
Step2: Determine the journal entry
We debit Bad - Debt Expense and credit Allowance for Doubtful Accounts. Since no amount for the estimated bad debts is given other than the existing credit balance of the allowance account, we assume we are just adjusting the allowance account as per the normal process.
Answer:
| Date | General Journal | Debit | Credit |
|---|---|---|---|
| December 31 | Bad - Debt Expense | [To - be - determined amount] | [To - be - determined amount] |
| December 31 | Allowance for Doubtful Accounts | [To - be - determined amount] |
Note: Without knowing the estimated amount of bad debts to be added to the existing $12,500 credit balance of Allowance for Doubtful Accounts, we cannot fill in the specific debit and credit amounts. If we assume the estimated bad debts for the period is $X$, the journal entry would be:
| Date | General Journal | Debit | Credit |
|---|---|---|---|
| December 31 | Bad - Debt Expense | $X$ | |
| December 31 | Allowance for Doubtful Accounts | $X$ |