Deborah Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $2,100,000 and $50,000 (Cr.), respectively.An aging of accounts receivable indicated that $180,000 is expected to become uncollectible.The amount of the adjusting entry for bad debts at December 31 is

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The adjusting entry for bad debts is calculated as the difference between the desired balance in the Allowance for Doubtful Accounts ($180,000) and the existing credit balance ($50,000). Therefore, the adjustment needed is $180,000 - $50,000 = $130,000.

Deborah Company's Account Balances at December 31 for Accounts Receivable