All of the company's sales are on credit. The company estimated that their bad

debt expense would be $1\%$ of sales. Each month during this past year of

operation, the company would record the estimated bad debt expense at $1\%$ of

the month's sales. A review of the accounts receivable identified two accounts in

the accounts receivable detail listing $($that reconciles to the unadjusted trial

balance$)$ that should be written off for a total of $$3,920.$

Year$-$end review of Accounts Receivable noted that an $$8,000$ account receivable

from Mertens Corp was rewritten on December $1,2022$ as a Short Term Interest

Bearing Note. The Note Receivable was signed with the authorized

representative of Mertens Corp but the transaction was not recorded in the

accounting records. The $$8,000$ is still included in the year end accounts

receivable balance. Interest on this note receivable is earned at an annual rate of

$6\%$ with interest payable in quarterly installments at the end of each quarter,

with interest due March $1,$ June $1,$ September $1$ and December$1.$

Additional review of the accounts receivables was performed and each of the

accounts $($after making the required adjustments for items $1$ and $2)$ were aged

and a total allowance of doubtful accounts was determined to be $$8,730$ given

the allowance rates established by the CPA firm last year for the various aging

categories. You have decided to prepare the adjusting entries using these

allowance rates given there have not been any changes in the credit policies of

Dunn Industries over the past year.

Sales on the trial balance includes $$14,000$ of advances from customers of which

only $$2,500$ was earned as of December $31,2022.$

Year ending December $31,2022$ ended on a Wednesday and payroll is as of Friday

each week. The payroll covering the week ended January, $2,2023$ was $$2,600.$

The salary expense was incurred evenly through the five$-$day work week.