A Newly Created Design Business Called Smart Art Is Just

Essay

A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the percent-of-sales method to account for uncollectible account expense, and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense. Show the journal entry required to record Uncollectible account expense at the end of the year.