At December 31 of the current year, a company reported the following: Total sales for the current year: $780,000, includes $160,000 of cash sales. Accounts Receivable balance at December 31 of the current year: $190,000 Bad Debts written off during the year: $6,800 Balance of Allowance for Doubtful accounts at January 1, current year $8,300
Prepare the necessary adjusting entries to record bad debt expense assuming the company's bad debts are estimated to equal:
1. 1.5% of credit sales
2. 5% of accounts receivable