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At December 31 of the current year, a company reported the following:
- Total credit sales for the current year: $1,200,000
- Accounts receivable balance at December 31 of the current year: $360,000.
- Balance of Allowance for Doubtful Accounts credit balance at December 31: $10,400.
Prepare the necessary adjusting entry to record bad debt expense assuming this companys bad debts are estimated to equal 2.5% of credit sales.
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