A7-6 Accounts Receivable-Allowances and Entries (LO7.5): The net accounts receivable on the books of GJY Corp. as of 1 January 20X3 are as follows: During the year, the sales discount allowance is left unchanged, with discounts recorded directly i the sales discounts account. Allowances are adjusted at year-end. Summarized transactions during 20X3 are as follows: a. Sales revenue was $620,000, of which 70% was on credit. b. Customers paid off $492,500 of the outstanding accounts receivable. Of this reduction to the accounts receivable, $300,000 was paid in time to earn a 2% discount. c. Accounts of $7,650 were written off at year-end. d. There were recoveries of previously written-off accounts in the amount of $1,400. e. At year-end, analysis of accounts receivable indicates that an allowance of $3,950 is needed for sales discounts. f. At year-end, the allowance for doubtful accounts is increased by 1% of gross credit sales. Required: 1. Prepare journal entries for the above transactions. 2. Show how the net accounts receivable appear on the statement of financial position on 31 December 20X3