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Utopia Corporation provides $6,000 worth of lawn care on account during the month. Experience suggests that about 3% of net credit sales will not be collected. To record the potential bad debts, Utopia Corporation would debit:

Respuesta :

Answer:

Journal Entry

Explanation:

The Journal Entry is shown below:-

Bad debt expense Dr,               $180

         To Accounts receivable            $180

(Being bad debt expenses is recorded)

Working Note:-

Bad debt expense = $6,000 × 3% = $180 is estimated

Therefore for recording the bad debt expenses we debited bad debt and credited accounts receivable.

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