Answer:
The journal entry is as follows:
On August 31,
Bad expense A/c Dr. $53,482
To Allowance for doubtful accounts $53,482
(To record the adjustment entry to increase allowance for doubtful accounts)
Working notes:
Allowance for doubtful accounts:
= Allowance for Doubtful Accounts at August 31 - Allowance for doubtful accounts before adjustment on August 31
= $67,697 - $14,215
= $53,482
