26. if the allowance for doubtful accounts has a debit balance of $2,000 and the aging of accounts…

26. if the allowance for doubtful accounts has a debit balance of $2,000 and the aging of accounts receivable indicates that $6,000 will not be collectible, what should be recorded in bad debts expense? select... a credit of $4,000 a debit of $4,000 a debit of $6,000 a debit of $8,000

26. if the allowance for doubtful accounts has a debit balance of $2,000 and the aging of accounts receivable indicates that $6,000 will not be collectible, what should be recorded in bad debts expense? select... a credit of $4,000 a debit of $4,000 a debit of $6,000 a debit of $8,000

Answer

Explanation:

Step1: Understand allowance account nature

The Allowance for Doubtful Accounts is a contra - asset account. It should have a credit balance. Currently, it has a debit balance of $2,000.

Step2: Determine required ending balance

The aging of accounts receivable indicates that the required ending credit balance of the Allowance for Doubtful Accounts should be $6,000.

Step3: Calculate bad debts expense

To get from a $2,000 debit balance to a $6,000 credit balance, we need to record a credit to the allowance account for $2,000 + 6,000=8,000$. The corresponding entry is a debit to Bad Debts Expense for $8,000$.

Answer:

A debit of $8,000