At December 31, 2020 Luxe Incorporated is reviewing its financial statements. The controller has found the following items.

1. Luxe Inc., purchased equipment on January 1, 2018 at a cost of $120,000. The equipment has a residual value of $20,000 and a useful life of 8 years. The equipment was recorded using straight line depreciation but the bookkeeper failed to consider the residual value. Depreciation for 2020 has been recorded.

2. During 2020 Luxe Inc., changed their estimate of uncollectible accounts from 2% of sales to 1.5% of sales. However, the bookkeeper was not made aware of the change and booked the provision using the 1.5%, as a result the net realizable value of receivables was understated by $5,500.

Required:

Prepare any journal entries required as a result of this review. If no entry is required, state so and support your answer. The books for 2020 have been adjusted but not closed. Luxes tax rate is 30%.