Kandel Company had the following data available for 2014 (before making any adjustments):

Accounts receivable, 12/31/14 ……………………………. $320,100 (Dr.)

Allowance for doubtful accounts ………………………….. 2,600 (Cr.)

Net credit sales, 2014 ……………………………………… 834,000 (CL)

Required

1. Prepare the journal entry to recognize bad debts under the following assumptions:

(a) Bad debts expense is expected to be 2% of net credit sales for the year and

(b) Kandel expects it will not be able to collect 6% of the balance in accounts receivable at year—end.

2. Assume instead that the balance in the allowance account is a $2,600 debit How will this affect your answers to part (1)?