3. (8 points) The balance sheet of Starsky Company at December 31, 2018, includes the following.Accounts receivable500,000Less: Allowance for doubtful accounts(40,000)$460,000Transactions in 2019 include the following.1.Sales on credit for the year were $1,000,000. (all service revenue)2.Accounts receivable of $850,000 were collected.3.Customer accounts of $34,000 were written off during the year.4.At year-end, bad debts were estimated to be 5% of the ending A/R balance (based on the % of A/R method). Make sure to update the A/R and Allowance balance for the transactions above before calculating bad debt expense.Prepare all journal entries necessary to reflect the transactions above.AccountsDebitCredit1.2.3.

3. (8 points) The balance sheet of Starsky Company at December 31, 2018, includes the following. Accounts receivable 500,000 Less: Allowance for doubtful accounts (40,000) $460,000 Transactions in 2019 include the following. 1. Sales on credit for the year were $1,000,000. (all service revenue) Accounts receivable of $850,000 were collected. Customer accounts of $34,000 were written off during the year. 4. At year-end, bad debts were estimated to be 5% of the ending A/R balance (based on the % of A/R method). Make sure to update the A/R and Allowance balance for the transactions above before calculating bad debt expense. Prepare all journal entries necessary to reflect the transactions above. Accounts Debit Credit