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