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.