Royal Company uses the income statement approach to estimate bad debt. During the year, the...
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Royal Company uses the income statement approach to estimate bad debt. During the year, the company had sales of $500,000 of which $50,000 is currently owing as accounts receivable. On the basis of historical sales, Royal estimates that 2% of sales will be uncollectible. Prepare the journal entry to record bad debt expense for the year. Select one: a. Debit Bad Debt Expense $9,000, credit Allowance for Doubtful Accounts $9,000 b. Debit Bad Debt Expense $1,000, credit Allowance for Doubtful Accounts $1,000 c. Debit Bad Debt Expense $10,000, credit Allowance for Doubtful Accounts $10,000 d. Debit Allowance for Doubtful Accounts $10,000, credit Bad Debt Expense $10,000
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