Racing Stripes uses the Allowance method for handling receivables.  They have decided that 1.5% of all credit sales are uncollectable.  Credit sales for the year were $1,400,000 and the allowance for doubtful accounts has a $2,000 credit balance.

1. Calculate bad debt expense. 
2. Prepare the Dec 31 Journal entry to record bad debt expense 
3. Post your entry to the T-accounts

b) 

Journal

Date	Description	Debit	Credit
Dec 31
Dec 31

c) 

Bad Debt Expense

Debit	Credit
Double line	Double line

Allowance for Doubtful Accounts

Debit	Credit
Double line	Double line