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Question - The aging schedule at December 31, 2020, for Gonzalez Inc. shows the following breakdown of total accounts receivable.
Status Amount
Not past due $455,000
Past due 1-30 days 108,000
Past due 31-60 days 55,000
Past due over 60 days 14,000
Total $632,000
The company considers the risk of credit losses to be similar within the aging pools and estimates the following credit loss rates by pool: not past due, 0.7%; past due 1-30 days, 1.7%; past due 31-60 days, 2.9%; and past due over 60 days, 8%. The Allowance for Doubtful Accounts has a $3,400 credit balance before adjustment. What amount is debited to Bad Debt Expense to adjust the Allowance for Doubtful Accounts to its desired ending balance on December 31, 2020?
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