1. Highland Company uses the allowance method of handling credit losses. It estimates losses at 3% of credit sales, which were si, 400,000 during the year. On December 31. the Accounts Receivable balance was S280,000, and the Allowance for Doubtful Accounts had a credit balance of $1,800 before adjustment. a. Prepare the adjusting entry to record credit losses for the year. b. Show how the Accounts Receivable account and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet. (DoTaccounts for Allowance for Doubyiul Accounts, then show Balance Sheet presentation.) Allowance for Doubtful Accounts Page 1