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Nichols Company Uses The Percentage Of Receivables

method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?
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Bad Debt Expense 6,000 Allowance for Doubtful Accounts 6,000

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