The transaction to record bad debt expense is posted as a debit to Bad Debt Expense and a credit to:

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When recording bad debt expense, the credit is to Allowance for Doubtful Accounts, which is a contra-asset account that reduces the balance of Accounts Receivable. This is because the expense is an estimation of the amount of accounts receivable that will not be collected in the future. By debiting Bad Debt Expense and crediting Allowance for Doubtful Accounts, the company is recognizing the expense and reducing the net amount of accounts receivable.

The Transaction to Record Bad Debt Expense Is Posted as a Debit