An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

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To record bad debts for the period, we need to adjust the balance of Allowance for Doubtful Accounts. The aging of accounts receivable indicates that $5,000 are estimated to be uncollectible, so we need to increase the balance of Allowance for Doubtful Accounts by $5,000. However, there is already a credit balance of $1,200 in Allowance for Doubtful Accounts, which means we only need to increase it by $3,800 ($5,000 - $1,200). Therefore, we need to debit Bad Debt Expense for $3,800 and credit Allowance for Doubtful Accounts for $3,800.

An Aging of a Company's Accounts Receivable Indicates That $5,000