After writing off bad debts of $1400 the allowance for doubtful debts account balance was $800 credit. What is the correct general journal entry to record an adjustment to bring the allowance for doubtful debts to 10% of accounts receivable of $20 000?
A) Debit bad debts expense $1200; credit allowance for doubtful debts $1200
B) Debit allowance for doubtful debts $1200; credit bad debts expense $1200
C) Debit bad debts expense $1200; credit accounts receivable $1200
D) Debit allowance for doubtful debts $1200; credit accounts receivable $1200
Correct Answer:
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