Indy Sport and Hobby’s Allowance for Doubtful Accounts

Indy Sport and Hobby’s Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes aA. credit to the Bad-Debt Expense account for $500.B. debit to the Bad-Debts Expense account for $900.C. credit to the Bad-Debts Expense account for $1,300.D. debit to the Bad-Debts Expense account for $500.

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