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Aaron Servicing showed the following partial unadjusted results at October 31, 2020, its year-end:
| Account | Debit | Credit |
| Sales | | | $ | 1,610,000 |
| Accounts receivable | $ | 145,000 | | |
| Allowance for doubtful accounts | | 3,000 | | |
| |
Part 1 Required: a. Assuming Aaron estimates bad debts to be 1.5% of sales, prepare the adjusting entry at October 31, 2020.
b. Show how accounts receivable would be shown on the October 31, 2020, balance sheet using your calculations in (a).
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