Wren Company had credit sales of $250,000 and cost of goods sold of $150,000 for the period. (a)Wren uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. (b)Wren uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,000. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250. prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method, and (b) aging of accounts receivable method.
1)Record the end-of-period adjustment for bad debts under the percentage of credit sales method
2)Record the end-of-period adjustment for bad debts under the aging of accounts receivable method.