Aging of receivables

[Ahsaan]

While Estimating the bad debt expense why there is need for minus credit balance of allowan from credit in aging of receivable method
Bad Debts Expense = $6,000 − $1,000 = $5,000

 

[kirby]

Let's say you estimate you have $6,000 in bad debts. If so, you need to make a provision entry of $6,000 in bad debt expense. BUT the allowance for bad debts already has $1,000 in it. So , you only need to place the DIFFERENCE into bad debts. $6,000 bad debts less $1,000 already in Allowance so $5,000 is entry
DR Bad Debt expense $5,000
CR Allowance for bad debts $5,000