Determining bad debt expense from an aging schedule
Hilary Company's year-end accounts receivable show the following balances by age:
|
Age of accounts
|
Balance
|
|
Not due yet
|
€600,000
|
|
0-30 days
|
200,000
|
|
31-60 days
|
45,000
|
|
61-120 days
|
20,000
|
|
More than 120 days
|
10,000
|
The credit balance in the allowance for doubtful accounts is now €8600. Hilary Company's prior collection experience suggests that Hilary should use the following percentages to compute the total uncollectible amount of receivables: 0-30 days, 0.5% 31-60 days, 1.0% 61-120, 10%, and more than 120 days, 70%.
Required
Prepare the journal entry to record Hilary's bad debt expense.