An Aging of a Company's Accounts Receivable Indicates That $4,500

question 190

Multiple Choice

An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,600 credit balance, the adjustment to record bad debts for the period will require a

• A) debit to Bad Debt Expense for $4,500.
• B) debit to Allowance for Doubtful Accounts for $2,900.
• C) debit to Bad Debt Expense for $2,900.
• D) credit to Allowance for Doubtful Accounts for $4,500.

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Definitions:

Bond Premium

The amount by which the market price of a bond exceeds its face value.

Annual Interest Expense

The total amount of interest a company expects to pay on its debts over a year.

$100,000 Bond

A debt instrument issued by a corporation or government entity, with a principal amount of $100,000, to raise funds from investors.

Premium

An amount paid in addition to a standard price or rate, or the amount above par value for a security.