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Sarasota company has a credit balance of $2,200 in allowance for doubtful accounts before adjustment. the estimated uncollectibles under the percentage-of-receivables basis is $5,100. prepare the adjusting entry. (credit account titles are automatically indented when the amount is entered. do not indent manually.)

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Answer and Explanation:

The adjusting entry is shown below:

Bad debt expense Dr $2,900 ($5,100 - $2,200)

        To Allowance for doubtful accounts $2,900

(Being the bad debt expense is recorded)

Here it debited the bad debt expense as it increased the assets and the allowance for doubtful accounts is credited as it decreased the assets

Also the expense and assets contains normal debit balance

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