Selzer Products Co. began operations on January 1, 2014, and completed a number of transactions during 2014 and 2015 that involved credit sales, accounts receivable collections, and bad debts. Assume a perpetual inventory system. These transactions are summarized as follows:
2014
a. Sold merchandise on credit for $1,640,000, terms n/30 (COGS = $1,070,000).
b. Received cash of $1,175,000 in payment of outstanding accounts receivable.
c. Wrote off uncollectible accounts receivable in the amount of $7,500.
d. In adjusting the accounts on December 31, concluded that 1% of the outstanding accounts receivable would become uncollectible.
2015
e. Sold merchandise on credit for $1,876,000, terms n/30 (COGS = $1,224,000).
f. Received cash of $1,444,000 in payment of outstanding accounts receivable.
g. Wrote off uncollectible accounts receivable in the amount of $8,600.
h. In adjusting the accounts on December 31, concluded that 1% of the outstanding accounts receivable would become uncollectible.
Required
Prepare General Journal entries to record the 2014 and 2015 summarized transactions of Selzer Products Co., and the adjusting entries to record bad debt expense at the end of each year.