Accounting for uncollectible patient accounts:
The Metro County Hospital could not collect the amount billed to a patient who declared bankruptcy and had no assets with which to pay his debts. Assuming the patient owed the hospital $3,000, prepare the entry or entries necessary to record the uncollectible account if the hospital uses the allowance method.
After preparing the necessary entry or entries, state what effect the write-off will have on the balance sheet.