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Cosmo Company reported credit sales of $345,000 for the calendar year in its first year of operations. At December 31, customers buying on credit owed $35,000 to the company. Based on the experience of similar businesses, management estimates that $3,500 of its accounts receivable will be uncollectible. Prepare the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Respuesta :

Answer:

The journal entry to be recorded for the following is shown below:

Explanation:

The journal entry to be recorded for the following is as:

Bad debt expense A/c................................Dr  $3,500

      Allowance for doubtful accounts A/c.......Cr  $3,500

Being record the estimated bad debt expense

As the company estimated $3,500 will be uncollectible amount for the following year, so the bad debt expense will be debited as there is increase in the expense of the company and it is against the allowance for the doubtful accounts. Therefore, the account of allowance for the doubtful is credited.

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