A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: 
Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.
Definitions:
Times Interest Earned Ratio
A financial metric that measures a company's ability to meet its interest payments on outstanding debt.
Creditors
Entities or individuals to whom money is owed by a business or individual for goods or services provided or as a result of a loan.
Present Value
Today's equivalent value of a prospective sum or cash flows expected later, arrived at by applying a certain rate of return.
Compounded Annually
Describes the process of earning interest on both the initial principal and the accumulated interest from previous periods on an annual basis.
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