At the end of 2018,Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (debit)before any adjustment.The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method.Murray State's adjustment on December 31,2018,to record its estimated uncollectible accounts included a:

Question

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The adjustment to record the estimated uncollectible accounts would require a debit to Bad Debt Expense for the estimated amount of $12,000 and a credit to Allowance for Uncollectible Accounts for the same amount. However, since the Allowance for Uncollectible Accounts already had a balance of $4,500 (debit) before any adjustment, the total credit to the account would be $16,500 ($4,500 + $12,000). Therefore, the correct choice is D.

At the End of 2018,Murray State Lenders Had a Balance