Bayfield Corp. is analyzing its accounts receivable for purposes of preparing its second-quarter financial report for June 30, 2020. For interim reporting, the company uses the percentage-of-sales method to estimate bad debts. During this analysis, Bayfield identified an account for $22,000 that should have been written off in the first quarter ended March 31, 2020, but was actually written off in May 2020. 

The following table provides information relating to Bayfield’s accounts receivables after recording the provision for bad debts for the quarter but prior to the discovery of the $22,000 error:

Required:

Record any adjusting journal entry or entries necessary to correct the error in Bayfield’s accounts receivable.

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Accounts receivable gross Allowance for doubtful accounts Accounts receivable net Bad debts expense March 31, 2020 $1,480,000 (83,000) $1,397,000 $ 145,000 June 30, 2020 $1,560,000 (95,000) $1,465,000 $ 178,000