Mega Sales has Gross sales of $1,525,000. Of these sales, $1,175,000 were on accounts receivable. During the year of 2007, there were sales returns and allowances and sales discounts on sales made on account of $55,000. Mega Sales calculates that 6 1/2% of the period sales less sales returns and allowances and sales discounts will be uncollectible.

Calculate the net realizable value of sales and write the journal entry to recognize the period expense of uncollectible accounts.