On dec 31, of the current year, a company's unadjusted trial balance revealed the following: accounts receivable of $185600; Sales Revenue of 128000; (75% were on credit); and allowance for doubtful accounts of 1600 (credit balance).
Prepare the following journal entry to record the estimate for bad debts assuming:
1. 6% of the accounts receivable balance is assumed to be uncollectible.
2. Bad debts expense is estimated to be 1.55 of credit sales.