At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2013, it has outstanding accounts receivable of $134,000, and it estimates that 3% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has (a) a $2,278 credit balance before the adjustment. (b) a $670 debit balance before the adjustment. Adjusting entries (all dated December 31, 2013).

Dec 31) Prepare the adjusting entry to record bad debts expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has a $2,278 credit balance before the adjustment.

Dec 31 b)

Prepare the adjusting entry to record bad debts expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has a $670 debit balance before the adjustment.