Problem 2: Bad Debt Journal Entries and Account Balances – P…

Problem 2: Bad Debt Journal Entries and Account Balances – Percentage of Sales Method Eagle, Inc. has net credit sales of $110,000 and estimates that bad debts are approximately 5% of net credit sales.  The year end balance of accounts receivable is $180,000. Using the above information, answer question 5-8.  Consider Scenarios 1 and 2 independently of each other.

Scenario 2: Record the journal entry assuming that the allow…

Scenario 2: Record the journal entry assuming that the allowance account currently has a credit balance of $800.  Use the following account headings in your response:                              Accounts                                                           Debit         Credit